The final month of 2025 began on Monday, with investors hoping for a smoother market performance to close out the year after a volatile November. The Nasdaq Composite (^IXIC) ended its seven-month winning streak, while the S&P 500 (^GSPC) rebounded to just 1% below its all-time high.

Markets wrapped up November with five consecutive days of gains in a holiday-shortened trading session on Friday. Despite the Nasdaq’s monthly streak breaking, it remains only 3% off its record high, and the Dow Jones Industrial Average sits less than 2% below its peak.

November’s turbulence was driven partly by concerns over an AI bubble, weighing on major tech stocks. Meta (META) fell 13%, NVIDIA (NVDA) dropped about 8%, and Oracle (ORCL) plunged nearly 30%. Alphabet (GOOG) was an exception, surging roughly 20% on strong earnings, positive reception for its Gemini 3 model, and reports of a multibillion-dollar AI chip deal with Meta.

This week, investor focus remains on the likelihood of a Fed rate cut in December, with traders pricing in an 86.9% chance of a 25-basis-point reduction. The Fed entered its pre-meeting blackout period on Saturday, leaving markets in a quiet phase ahead of the December 9-10 FOMC meeting.

Reports suggest the Trump administration is nearing a decision on Jerome Powell’s successor as Fed Chair, with National Economic Council Director Kevin Hassett emerging as a frontrunner. President Trump confirmed Sunday he has chosen a nominee who supports rate cuts but did not disclose details.

Economic data releases are normalizing after a 43-day government shutdown disrupted reporting. This week brings key updates on U.S. manufacturing, services activity, and the ADP private payrolls report.

Earnings season continues with discount retailers Dollar Tree (DLTR), Dollar General (DG), and Five Below (FIVE) reporting, alongside tech firms like Salesforce (CRM) and CrowdStrike (CRWD).

**Wall Street’s 2026 Optimism** Despite bearish signals—including skepticism from short-sellers Michael Burry and Jim Chanos on AI trades and mixed retail earnings—strategists remain bullish. JPMorgan forecasts the S&P 500 could hit 7,500 by late 2026 (a ~10% gain), potentially reaching 8,000 with sustained Fed cuts, citing economic resilience and an AI-driven "super cycle." HSBC and Deutsche Bank share similar targets, tying their outlooks to AI-driven productivity gains.

However, Deutsche Bank warns of volatility as markets oscillate between "boom" and "bust" narratives. LPL Financial’s Jeff Buchbinder notes, "Volatility is the toll investors pay for long-term returns—a lesson reinforced this year."

**Economic & Earnings Calendar Highlights** - **Monday**: ISM Manufacturing PMI (Nov), S&P Global Manufacturing PMI (Nov final); Earnings: Credo (CRDO), MongoDB (MDB), New Fortress Energy (NFE). - **Tuesday**: Earnings: CrowdStrike (CRWD), Scotiabank (BNS), Marvell (MRVL), Okta (OKTA), American Eagle (AEO). - **Wednesday**: ADP Employment (Nov), ISM Services PMI (Nov); Earnings: Salesforce (CRM), RBC (RY), Snowflake (SNOW), Dollar Tree (DLTR), Five Below (FIVE), Macy’s (M), C3.ai (AI). - **Thursday**: Jobless claims; Earnings: TD Bank (TD), BMO (BMO), Kroger (KR), HPE (HPE), Ulta (ULTA), Dollar General (DG). - **Friday**: Core PCE (Sept), Michigan Consumer Sentiment (Dec prelim); Earnings: Victoria’s Secret (VSCO).