The final month of the year gets underway on Monday, and investors will be looking for a smoother month to round out the year after choppy November trading saw the Nasdaq Composite (^IXIC) snap a seven-month winning streak while the S&P 500 (^GSPC) moved back to within 1% of a record high.
On Friday, markets ended the week by notching a fifth straight session of gains to close out the up-and-down month in a holiday-shortened trading session. And despite snapping its monthly winning streak, the Nasdaq is also within 3% of a record. The Dow is less than 2% off its record close.
And while the final five days were good to the market, the past month was anything but steady, as worries about a potential AI bubble weighed on some of the market’s heavyweights. Over the last month, Meta (META) stock has lost 13%, while Nvidia (NVDA) shares are down about 8%. Oracle (ORCL) has lost nearly 30% over this period.
The exception has been Google (GOOG), whose stock is up about 20% after a strong earnings report, positive reaction to its Gemini 3 model, and, this past week, reports of a multibillion-dollar AI chip deal with Meta.
In the week ahead, investor focus will remain on the odds of a rate cut at the Federal Reserve’s December meeting, with traders currently predicting an 86.9% chance of a quarter-point cut. The Fed entered its mandatory blackout period on Saturday, marking the start of a quiet week and a half before the Federal Open Market Committee meets on Dec. 9-10.
Reports this past week also suggested that the Trump administration is getting closer to landing on a candidate to succeed Jerome Powell as chair of the Fed, with Kevin Hassett, director of the National Economic Council, appearing to have emerged as the frontrunner for the nomination.
The economic calendar will continue a slow normalization after the 43-day US government shutdown threw data collection into chaos, with private reports on US manufacturing activity, service sector activity, and ADP’s monthly private payrolls report featured.
On the corporate earnings side, bargain retailers Dollar Tree (DLTR), Dollar General (DG), and Five Below (FIVE) are all reporting, while Salesforce (CRM) and CrowdStrike (CRWD) will feature from the tech industry.
Federal Reserve Chair Jerome Powell looks at U.S. President Donald Trump holding a document during a tour of the Federal Reserve Board building, which is currently undergoing renovations, in Washington, D.C., U.S., July 24, 2025. REUTERS/Kent Nishimura/File Photo ·Reuters / Reuters
Investors have been getting plenty of bearish signals over the past month.
Famed short sellers Michael Burry and Jim Chanos made calls against the AI trade. Nvidia leadership published an ill-received letter attempting to assert that the chipmaking giant does not, in fact, have the same structural problems as Enron. Elsewhere, the largest US retailers saw mixed results in third quarter earnings as consumers have been squeezed by inflated prices.
Strategists on the Street, however, see a rosier picture for the stock market going forward.
Top equity strategists at JPMorgan see the S&P 500, currently sitting at 6,849, reaching 7,500 by the end of 2026 — a nearly 10% rally. If the Federal Reserve keeps cutting interest rates, the bank sees a case for the index to cross 8,000.
“The U.S. is set to remain the world’s growth engine, driven by a resilient economy and an AI-driven supercycle that is fueling record capex and rapid earnings expansion,” JPMorgan strategists wrote in a client note.
Elsewhere on the Street, HSBC strategists set their 2026 price target at 7,500 while Deutsche Bank predicted the index would hit 8,000. All three firms pegged their bullish calls to the AI trade.
“Back then [in the 1990s equity boom], like today, tech is leading, return concentration is high, and a new technology is promising to be transformational. We expect equities to remain supported by the AI-led capex boom,” HSBC strategists wrote.
At Deutsche Bank, strategists expect volatility between now and what they see as a clearly more efficient — and, in turn, higher-earning — corporate environment as a result of AI innovation.
“Given the pace of technological advancement, it is almost impossible to believe this won’t translate into meaningful productivity gains in the years ahead,” Deutsche Bank’s team wrote.
“In the meantime, markets could swing sharply between boom-and-bust narratives, irrespective of their eventual destination. So, while our global economists and strategists remain largely positive for 2026, expect no lay-up in volatility or sentiment swings.”
The bullish outlook for 2026, then, essentially calls for a replay of 2025, with November serving as the prime example of what it takes to realize above-average returns.
“Volatility is like a toll that investors pay on the road to attractive long-term returns,” LPL Financial chief equity strategist Jeff Buchbinder wrote in an email. “This year offers us this powerful lesson once again.”
Traders Patrick Casey, left, and Timothy Nick work on the floor of the New York Stock Exchange, Wednesday, Nov. 19, 2025, in New York. (AP Photo/Richard Drew) ·ASSOCIATED PRESS
Economic data: S&P Global US manufacturing PMI, November final reading (51.9 previously); ISM manufacturing, November (49 expected, 48.7 previously)
Earnings: Credo Technology Group (CRDO), MongoDB (MDB), New Fortress Energy (NFE)
Economic data: No notable economic data.
Earnings: CrowdStrike (CRWD), The Bank of Nova Scotia (BNS), Marvell Technology (MRVL), Okta (OKTA), American Eagle Outfitters (AEO)
Economic data: MBA mortgage applications, week ended Nov. 28 (0.2% previously); ADP employment change, November (+20,000 expected, +42,000 previously); Import price index, month-on-month, September (+0.1% expected, +0.3% previously); Export price index, month-on-month, September (0% expected, +0.3% previously); Industrial production, month-on-month, September (+0.1% expected, +0.1% previously); S&P Global US services PMI, November, final reading (55 previously); S&P Global US composite PMI, November, final reading (55 previously); ISM services index, November (52 expected, 52.4 previously)
Earnings: Salesforce (CRM), Royal Bank of Canada (RY), Snowflake (SNOW), Dollar Tree (DLTR), Five Below (FIVE), Macy’s (M), Uranium Energy Corp. (UEC), C3.ai (AI)
Earnings: Toronto-Dominion Bank (TD), Bank of Montreal (BMO), Kroger (KR), Hewlett Packard Enterprise (HPE), Ulta Beauty (ULTA), Dollar General (DG), Samsara (IOT), The Cooper Companies (COO), DocuSign (DOCU), Brown-Forman Corporation (BF-A, BF-B), Rubrik (RBRK)
Economic data: Personal income, September (+0.3% expected); Personal spending, September (+0.3% expected); Real personal spending, September (0.1% expected); PCE price index, month-on-month, September (+0.3% expected); PCE price index, year-on-year, September (+2.8% expected); Core PCE price index, month-on-month, September (+0.2% expected); Core PCE price index, year-on-year, September (+2.8% expected); University of Michigan sentiment, December preliminary reading (52 expected, 51 previously)
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.
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