Stock Market Today - S&P 500 6,735, Nasdaq 23,024, and Dow 46,358 Consolidate; AI Stocks NVDA, META, GOOGL Diverge

Stock Market Today - Wall Street Pulls Back From Records as Investors Lock Gains

U.S. equities opened the final month of 2025 with mild weakness after a historic rally. The S&P 500 (^GSPC) closed at 6,735.11, down 0.28%, while the Nasdaq Composite (^IXIC) slipped 0.08% to 23,024.62. The Dow Jones Industrial Average (^DJI) declined 0.52%, finishing at 46,358.42. The pullback followed a five-session winning streak and profit-taking across sectors after new record highs. Gold prices, which had surged past $4,000 per ounce for the first time, retreated to $3,945, as traders booked gains following weeks of safe-haven inflows driven by the prolonged U.S. government shutdown and mounting expectations for Federal Reserve rate cuts later in the year.

Nasdaq and S&P 500 Trade Just Below All-Time Highs

Despite the pause, both indices remain near peak territory: the S&P 500 sits just 1% below its record at 6,800, and the Nasdaq Composite is only 3% away from its high of 23,720. The tech-heavy Nasdaq lost momentum as investors reassessed AI valuations after a volatile November. Nvidia (NASDAQ: NVDA), which closed Friday at $123.70, has fallen roughly 8% over the month amid concerns about AI chip oversupply and competition. Meta Platforms (NASDAQ: META) ended at $395.25, down 13% in November, reflecting short-term AI fatigue. In contrast, Alphabet (NASDAQ: GOOGL) rallied nearly 20% in November, closing at $318.47, after unveiling its Gemini 3 AI model and announcing a multibillion-dollar AI chip partnership with Meta. Oracle (NYSE: ORCL) continued its deep correction, losing almost 30% to settle near $97.40, as cloud growth decelerated.

Federal Reserve Policy and Leadership Shifts Ahead of December Meeting

Markets are now pricing an 86.9% probability of a 25-basis-point rate cut at the December 9–10 FOMC meeting, potentially lowering the federal funds rate to 4.75%–5.00%. The Fed entered its pre-meeting blackout period this weekend, signaling a quiet phase ahead of policy decisions. Speculation continues over a possible transition at the central bank, with Kevin Hassett, head of the National Economic Council, reportedly emerging as the leading candidate to replace Jerome Powell as Fed Chair. The 43-day government shutdown has delayed crucial data releases — including CPI, payrolls, and the 2026 Social Security COLA — leaving investors without key inflation indicators as rate decisions approach.

Earnings Spotlight: Salesforce, CrowdStrike, Dollar Tree, and Discount Retailers

Traders are focused on upcoming corporate earnings from Salesforce (NYSE: CRM), trading at $271.60; CrowdStrike (NASDAQ: CRWD), closing at $333.10; and discount chains Dollar Tree (NASDAQ: DLTR) at $132.40, Dollar General (NYSE: DG) at $141.20, and Five Below (NASDAQ: FIVE) at $197.65. These reports will reveal the strength of consumer spending following Black Friday and Cyber Monday, both of which showed record transaction volumes but narrower margins. The S&P 500’s Q3 earnings grew 13.4% year-over-year, with average profit margins holding above 11.5%, confirming resilient corporate fundamentals despite slower retail volume growth.

Wall Street’s 2026 Targets Reflect Confidence in Extended Rally

Deutsche Bank raised its 2026 price target for the S&P 500 to 8,000, implying roughly +17% upside from current levels, driven by buyback acceleration and sustained earnings growth. Morgan Stanley projects a 7,800 finish, citing a confirmed transition into a new bull market. HSBC and JPMorgan both forecast 7,500, with JPMorgan noting upside to 8,000 if inflation cools further and the Fed maintains an easing path. Wells Fargo expects a two-phase rally — a “reflation trade” in early 2026 followed by a second-half AI-led expansion — targeting 7,800. Consensus across institutions points toward double-digit equity returns next year, underpinned by strong liquidity and capital inflows.

AI Sector Volatility and Valuation Stress

The profitability of AI remains the core tension in the market. Nvidia (NVDA), with a market cap near $3.1 trillion, dropped from $134 to $123 in November as investors questioned the pace of monetization from hyperscale data centers. Alphabet (GOOGL) surged from $265 to $318, surpassing a $4 trillion valuation, buoyed by positive early reviews of its Gemini 3 platform. Meta (META) declined sharply, losing over $60 billion in value after reports of heavy AI CapEx expansion. The AI trade, which contributed nearly 70% of the Nasdaq’s YTD gains, is showing early signs of exhaustion as traders shift into cyclicals and small caps.

Gold Prices Ease From Record Highs Amid Profit-Taking

After soaring past $4,015 per ounce, gold (XAU/USD) declined 1.6% to $3,950, as Treasury yields rose to 4.42% on the 10-year note. The retreat followed intense safe-haven demand during the shutdown and risk aversion earlier in November. Year-to-date, gold remains up 32%, outperforming the U.S. Dollar Index (DXY), which slipped 2.1% in November to 101.8. Technically, support sits at $3,880, while resistance remains firm at $4,050 — a decisive break could determine the next leg of the rally heading into 2026.

Sector Rotation and Market Breadth Expansion

Small-cap stocks and rate-sensitive sectors outperformed last week as investors rotated away from mega-cap technology. The Russell 2000 Index (RUT) rose 2.1% to 2,210, outperforming both the S&P 500 and Nasdaq. Bitcoin (BTC-USD), once above $125,000 in October, fell sharply to $89,340, reflecting weaker risk appetite. This divergence between crypto and equities suggests traders are tactically reallocating into defensive sectors like financials and industrials in anticipation of a Fed rate cut.

Market Direction and Tactical Stance

The equity market remains in an uptrend, supported by strong liquidity and resilient earnings. The S&P 500 faces immediate resistance at 6,870 and psychological support near 6,650. A Fed rate cut in December could push the index toward 7,000 by year-end. The Nasdaq Composite could retest 23,800, while the Dow Jones eyes 48,000 as the next ceiling. Sector rotation is likely to intensify as investors seek exposure to lagging groups. The short-term outlook remains bullish — Buy on pullbacks, with selective accumulation in undervalued cyclicals, banks, and quality tech leaders showing sustained free-cash-flow strength.

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