Bargain Hunting Emerges After This Month's AI Correction
Tech Stocks Like Nvidia and Microsoft Rally, While Alphabet Turns Lower
Rate Cut Expectations Persist for December
Focus Shifts to Next Fed Chair Appointment
The three major indices of the US stock market were on an upward trend on the 26th (local time), a day before Thanksgiving. After experiencing a correction earlier this month due to concerns over overheating in artificial intelligence (AI) investments, the market is attempting a fourth consecutive day of gains, supported by bargain hunting and expectations of a rate cut in December.
On the 26th, a day before Thanksgiving (local time), people dressed as Santa Claus and fairies visited the New York Stock Exchange (NYSE) in the United States. Photo by AFP Yonhap News
As of 10:53 a.m. on the New York Stock Exchange, the blue-chip Dow Jones Industrial Average was up 238.52 points (0.51%) at 47,350.97 compared to the previous trading day. The S&P 500 Index, which focuses on large-cap stocks, rose by 36.14 points (0.53%) to 6,802.02, while the tech-heavy Nasdaq Index climbed 134.376 points (0.58%) to 23,159.968. Despite increased volatility due to lower trading volume ahead of the Thanksgiving holiday, the upward momentum in stock prices has continued.
By sector, Nvidia, the leading AI stock, rose by 1.52%. Microsoft was up 1.65%, and Apple gained 0.46%. Alphabet, Google's parent company, which hit a record high the previous day, was down 1.63%. Recently, Google's latest AI model 'Gemini 3' received favorable reviews, and news that Meta, Facebook's parent company, would adopt Google's AI chips led Alphabet to set new record highs for several consecutive days.
Clark Bellin, President and Chief Investment Officer (CIO) at Bellwether Wealth, stated, "Bargain buying remains active, helping stocks recover from recent weeks of weakness," and added, "The market's decline in November was about 4% from the October peak, which is much smaller than the typical correction benchmark of 10%." However, he also noted, "While the stock market is expected to reach new all-time highs, there is no clear catalyst to push the market higher through the end of the year."
Amid growing concerns over a slowdown in employment, the number of new weekly jobless claims announced that day was lower than expected. According to the Department of Labor, new jobless claims for the week of November 16 to November 22 totaled 216,000, a decrease of 6,000 from the previous week and well below the expert forecast of 225,000. This marks the lowest level since mid-April. This suggests that while companies are hesitant to hire new employees, they are generally maintaining existing employment. On the other hand, the number of continuing jobless claims-those applying for unemployment benefits for more than two weeks-was 1.96 million for the week of November 9 to November 15, an increase of 7,000 from the previous week, indicating that it is becoming increasingly difficult for the unemployed to find new jobs.
With no significant new factors, market attention is focused on whether the US Federal Reserve will cut its benchmark interest rate next month. In September, retail sales rose only 0.2% from the previous month, signaling a slowdown in recovery, and the Producer Price Index (PPI) increased by 0.3%, matching market expectations. As a result, expectations for a rate cut have been maintained. According to the CME FedWatch Tool, there is an 82.9% probability that the Fed will cut the current benchmark interest rate of 3.75-4.0% by 0.25 percentage points in December.
Meanwhile, Bloomberg News reported the previous day that Kevin Hassett, Chairman of the US National Economic Council (NEC), is a leading candidate for the next Fed Chair. In a recent Fox News interview, Hassett stated that if he were the Fed Chair, "I would cut rates right now," positioning himself as someone who would implement monetary policy in line with President Donald Trump's calls for lower rates. Treasury Secretary Scott Bessent said in a CNBC interview the previous day that President Trump may nominate the next Fed Chair before Christmas on December 25. The term of current Fed Chair Jerome Powell expires in May next year.
US Treasury yields saw a slight rebound. The yield on the benchmark 10-year US Treasury note rose by 1 basis point (1bp = 0.01 percentage point) from the previous day to 4.01%, while the yield on the rate-sensitive 2-year US Treasury note fell by 3 basis points to 3.49%.
Meanwhile, the US stock market will be closed on the 27th for Thanksgiving and will have an early close at 1 p.m. on the 28th.
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