Market Volatility and AI Trade Uncertainty Ahead of Thanksgiving
Wall Street enters Thanksgiving week amid heightened uncertainty, particularly around the AI trade. Markets face a shortened trading schedule, with closures on Thursday and a half-day on Friday, traditionally a period prone to erratic price movements. November's typical bullish momentum has faltered this year, as major indexes slide following a cooling AI rally and growing skepticism over tech valuations.
Trading volumes are anticipated to decline further, with no significant catalysts expected before the Federal Reserve's December meeting. The latter part of the month may drift into sluggish trading, exacerbating investor unease. A sharp reversal on Thursday underscored the fragility of market sentiment—early gains fueled by Nvidia's robust earnings and stronger-than-expected September jobs data were erased by an afternoon selloff.
Friday brought another twist: stocks rallied after New York Fed President John Williams hinted at a potential December rate cut. This whipsaw action has left traders grappling with conflicting signals. Charlie Ashley of Catalyst Funds noted, 'A reversal of this magnitude suggests positive sentiment is waning. Investors are using Nvidia's post-earnings bounce as a profit-taking opportunity.'
