USs stocks rose on Monday, with Alphabet driving a broader rebound as the market attempted to stabilise after a sharp November decline driven by fading enthusiasm for artificial intelligence stocks.
Major indices gained ground heading into the Thanksgiving holiday week, though volatility remains a concern given thinning trading volumes and persistent questions around elevated valuations.
Alphabet Boosts Nasdaq as AI Optimism Returns
The S&P 500 advanced 0.8%, while the Nasdaq Composite climbed 1.6%.
The Dow Jones Industrial Average added 53 points, or 0.1%. US markets will be closed on Thursday for Thanksgiving and will shut early at 1 p.m. ET on Friday.
Alphabet shares rose 4% after investors reacted positively to Google’s unveiling last week of Gemini 3, its upgraded AI model released roughly eight months after the debut of Gemini 2.5.
The move helped restore some confidence in Alphabet’s positioning within the intensifying race for AI leadership, providing upward momentum at a time when enthusiasm around AI-linked stocks has been fading.
Monday’s gains extended a recovery that began Friday, when comments from New York Federal Reserve President John Williams suggested policymakers remained open to a potential interest-rate cut in December.
The optimism provided a temporary counterweight to a difficult month for equities.
Markets attempt to recover from sharp November losses
Despite Monday’s bounce, major indices remain deep in negative territory for November.
The S&P 500 declined 2% last week and is now down about 3% for the month.
The Nasdaq Composite, which fell 2.7% last week, has dropped nearly 5% in November.
The Dow shed 1.9% last week and remains off nearly 3% this month.
A key driver of the slide has been the steep reassessment of valuations across the AI sector, which had powered much of the market’s gains earlier in the year.
Investors have grown more cautious as rising financing costs, slowing corporate spending, and heightened competitive pressures shape expectations for future growth.
The final days of November may not bring much relief. With few major catalysts ahead of the Federal Reserve’s December policy meeting, and with trading activity expected to slow ahead of the holiday, analysts warn that volatility could pick up.
Waller Reinforces Case for December Cut
Federal Reserve Governor Christopher Waller added to the dovish tone Monday, saying he supports a rate cut at the Fed’s December 9–10 meeting.
He cited ongoing softness in the labour market as the primary factor influencing his view.
“My concern is mainly labour market, in terms of our dual mandate. So I’m advocating for a rate cut at the next meeting,” he told Fox Business Network.
Waller noted that beginning in January, the Fed may shift to a more incremental, meeting-by-meeting approach as fresh economic data become available.
Investors currently assign a roughly 70% probability of a December cut, according to futures markets, though officials remain split.
Some policymakers continue to focus on inflation risks, while others point to moderating labour conditions and slower momentum across parts of the economy.
Waller’s remarks followed those of New York Fed President John Williams, who last week said that labour market risks now outweigh inflation concerns.
In Chile, Williams described monetary policy as “modestly restrictive,” and said he sees “room for a further adjustment in the near term” to move policy closer to neutral.
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