Federal Reserve official John Williams signaled openness to near-term rate cuts, sparking a rebound in Nasdaq 100 futures from an earlier 0.6% drop to a 0.6% gain. European stock losses also narrowed.

As of the latest update, Dow futures rose 0.6%, S&P 500 futures gained 0.6%, and Nasdaq futures climbed 0.6%.

New York Fed President Williams hinted at the possibility of another rate cut in December. His remarks, as a key Fed policymaker, lifted sentiment in the AI sector and boosted traders' expectations for a Fed rate cut next month—which would mark the third reduction this year.

According to CME's FedWatch Tool, traders now see a more than 70% chance of a 25-basis-point rate cut, up sharply from 39.1% the previous day.

Williams stated in a speech in Santiago, Chile: "I believe monetary policy is currently in a moderately restrictive range, though less restrictive than before our recent actions. Therefore, I still see room for further adjustments in the federal funds rate target range in the near term to move policy closer to neutral and maintain balance in achieving our dual mandate."

Before Williams' comments, the AI sector had braced for another weak session, but his remarks helped pare losses in pre-market trading. NVIDIA and Advanced Micro Devices both reversed earlier declines, rising about 1%.

Investors hope that looser monetary policy will support the sluggish economy and justify historically high valuations in tech stocks.

Major stock indices experienced sharp reversals in the previous session, with the market still under significant downward pressure this week.

On Thursday, the Dow surged over 700 points early, buoyed by NVIDIA's strong quarterly earnings, but gains faded as concerns grew that the Fed might hold rates steady in December. The Dow, S&P 500, and Nasdaq all closed sharply lower.

Year-to-date, the S&P 500 is down 2.9%, the Dow has lost nearly 3%, and the Nasdaq has declined 3.6%.

Some investors view Thursday's drop as a normal pullback after this year's rally rather than a sign of deeper correction.

Ryan Detrick, Chief Market Strategist at Carson Group, noted: "Market sentiment was overheated earlier this month, but after three weeks of disappointment, indicators now show extreme fear and concern. From a contrarian perspective, this washout is necessary to shake out weak hands."

Bitcoin fell about 3% on Friday, extending its weekly loss to over 11%—its lowest level since April as investors reduced risk exposure.

**A Rare Weak Stretch for Stocks** Since early November, U.S. stocks have struggled. The S&P 500 has retreated more than 5% from its late-October peak, while the Nasdaq is down nearly 8%, nearing a technical correction (≥10% drop). The Russell 2000 small-cap index has tumbled 8.5%. Thursday's decline put the S&P 500 on track for its worst November since 2008.

After six straight months of gains through October—its longest streak since August 2021—Nationwide's Hackett suggests the sell-off may partly reflect year-end profit-taking.

The Dow fared relatively better, falling 386.51 points (0.8%) to close at 45,752.26.

Consumer staples were the sole bright spot, led by Walmart's 6.5% surge to $107.11 after strong earnings.

**Goldman Sachs Warns: "The Market Is Bruised"** Goldman Sachs partner John Flood noted Thursday's reversal showed NVIDIA's blowout earnings failed to trigger broad risk-on sentiment, instead driving traders toward safety.

"The market is bruised," he said. "Investors are purely in capital-preservation mode, hyper-focused on hedging crowded risks."

Flood pointed out that since 1957, the S&P 500 has opened up over 1% but closed lower only eight times—including Thursday. Historically, such events were followed by average gains of at least 2.3% the next day and week, with a 4.7% rise over the next month.

**Bridgewater’s Dalio: 80% of Bubble Signals Present, But Don’t Panic Sell** Bridgewater founder Ray Dalio warned markets are in bubble territory, with "about 80% of the classic bubble indicators seen in 1929 and 2000."

However, he cautioned against knee-jerk selling, noting that timing is critical. "Don’t sell just because there’s a bubble," he said, adding that historically, buying at similar valuations and holding for a decade yielded annual returns between +2% and -2%.

**Citadel Securities: S&P 500 Could Hit 7,000 by Year-End** Citadel’s Scott Rubner predicts a strong rebound after a "healthy" pullback, with the S&P 500 potentially reaching 7,000 by December. He cites favorable positioning and seasonal tailwinds, including retail demand and lighter institutional positioning ahead of Thanksgiving.

**Key Stocks in Focus** - Lithium miners declined pre-market: Standard Lithium (-5.5%), Sigma Lithium (-5.9%), Albemarle (-5.4%), SQM (-5.5%), Lithium Americas (-2.9%). - NVIDIA extended losses, down nearly 1%. - Alphabet rose over 1.4% after unveiling its new AI image-generation model, Nano Banana Pro. - Sony rebounded 3.4% after Nomura upgraded its rating to "Buy." - Honda gained 2.7% as North American plants resume normal output amid easing chip shortages. - Nokia rose over 1% on reports of plans to spin off non-core businesses next year. - Bilibili climbed about 2% post-earnings as analysts maintained bullish calls. - NetEase fell over 2% after BofA cut its target price to $170.