On Thanksgiving holiday week, the S&P 500 (Index: SPX) rose 1.7% from its previous week's close, reaching 6,849.09 by the close of trading on Friday, 28 November 2025.
The index' gains was largely driven by growing expectations the U.S. Federal Reserve will act to cut the Federal Funds Rate when its Federal Open Market Committee concludes a two-day meeting on Tuesday, 10 December 2025, overcoming the opposition of the FOMC's biggest grumps who lost face during the year by predicting much higher inflation would result from tariffs than is supported by real world evidence. Through Friday, 28 November 2025, the CME Group's FedWatch Tool indicates an 87% probability of a quarter point rate cut on 10 December (2025-Q4), up from 71% a week earlier and from 44% the week before that.
In 2026, the FedWatch tool gives better than even odds for additional quarter point rate cuts on 29 April (2026-Q2), 29 July (2026-Q3), and 9 December (2026-Q4), which is unchanged from the previous week.
This growing expectation puts the S&P 500's trajectory will within the redzone forecast range we added to the alternative futures chart in the previous edition of the S&P 500 chaos series. Here's the latest update of the chart:
The other major story that's been driving the direction of the S&P 500 index during 2025 was relatively quiet during the Thanksgiving holiday-shortened trading week. However, what happens with firms making big AI technology-related investments continues to affect the market's direction, which in the past week meant providing the biggest boost to the markets' major indices. Here are the market-moving headlines from the week that was.
- Monday, 24 November 2025
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- Signs and portents for the U.S. economy:
- No recession risk for US economy as a whole after $11 billion shutdown hit, Bessent says
- Oil prices climb as market bets on US rate cut despite Ukraine peace hopes
- Companies tone down price hike talk as tariff fog clears
- US banks report 13.5% jump in profits: FDIC
- Fed minions still thinking about December rate cut:
- Bigger trouble developing in Japan, China:
- Japan can actively intervene to prop up yen, says govt panel member Aida
- China says Japan sent 'shocking' wrong signal on Taiwan
- Japan fiscal experiment is lab test for Treasuries
- Chief ECB minion thinks Eurozone minions' approach to AI technology is wrong:
- Nasdaq closed higher by more than 2% to kick off the holiday-shortened week
- Tuesday, 25 November 2025
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- Signs and portents for the U.S. economy:
- Oil dips on oversupply concerns while investors eye Ukraine talks
- Inflation weighing on US income growth ahead of holiday season, study says
- US pending home sales increase in October amid lower mortgage rates
- US tech valuations stretched further as earnings contribute less
- New leading candidate to be next Chief Fed minion, new minion sees rising unemployment as reason for December rate cut, Treasury Secretary not happy with how Fed manages interest rates:
- Hassett emerges as frontrunner to be Trump's next Fed chair, Bloomberg News reports
- Stocks Hit Session Highs On Report Hassett Emerges As Trump's Next Fed Chair Pick
- Good chance Trump may unveil Fed pick by Christmas, Bessent says
- Fed's Miran ties rising unemployment to current setting of monetary policy - Fox Business
- US Treasury secretary takes aim at Fed's interest rate control system
- Bigger trouble developing in Eurozone:
- Dow rallied over 650 points as Wall Street finished firmly in the green
- Wednesday, 26 November 2025
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- Signs and portents for the U.S. economy:
- US economic activity little changed ahead of next Fed meeting, report shows
- Oil edges up as investors await clarity on supply, Russia-Ukraine deal
- US weekly jobless claims at seven-month low amid low layoffs
- BOJ minions gearing up to hike Japan's interest rates:
- Bigger trouble developing in Eurozone, ECB minions say they're in no mood for more rate cuts:
- Reality check for EU: China is eating your lunch, find growth at home, ECB chief economist argues
- Euro zone banks should prepare for risk of dollar squeeze, ECB says
- ECB should cut rates only if inflation path points downward without rebound, Vujcic says
- Wall Street finished higher on fresh economic signals ahead of Thanksgiving
- Friday, 28 November 2025
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- Signs and portents for the U.S. economy:
- Big brokerages not sure which way Fed minions are going to go with cutting rates in December 2025:
- Bigger trouble, saber-rattling developing in China:
- China's next economic shift is primed for backlash
- China's factory activity set to shrink for eighth month: Reuters poll
- China's industrial profits fall in October after two months of strong growth
- Japan will pay 'painful price' if steps out of line over Taiwan, China military says
- Bigger stimulus developing in Japan, BOJ minions expected to hike rates:
- Japan finalises $117 billion extra budget to fund stimulus, mostly via debt
- Bank of Japan's Noguchi advocates gradual interest rate hikes
- ECB minions expected to not do anything with Eurozone interest rates anytime soon:
- ECB accounts show no hurry to cut rates, debate on declaring end of easing
- Euro zone growth, inflation on benign path, keeping rate cut bets muted
- Wall Street posts largest swing ever from red to green for the month of November
It's hard to believe OpenAI's ChatGPT has only been around for three years!
Meanwhile, the Atlanta Fed's GDPNow tool projection of real GDP growth in the U.S. during the recently ended 2025-Q3 decreased from +4.2% to +3.9% as economic data reports resume being reported following the end of the Senate Democrats' government shutdown fiasco. The BEA's official estimates of GDP for 2025-Q3 will likely be delayed into December 2025, which may happen around the time the GDPNow tool gets enough data to finally shift forward to 2025-Q4.
Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull who is being served a Thanksgiving turkey that says 'DECEMBER RATE CUT' by a grumpy Federal Reserve official".