Investors already have something to be thankful for as the stock market's selloff looks to have stopped for now. But the next few days before Black Friday are critical in deciding whether equities are really back on the shopping list.

A reprieve came on Friday. New York Federal Reserve President John Williams said he sees room for a "near-term" rate cut, pushing odds the Fed cuts interest rates next month to above 70% from 40% a week ago, according to CME's FedWatch tool.

That should also allay fears of inflated valuations for artificial intelligence plays -- as Barron's has argued, any bubble is unlikely to burst while the Fed is in the midst of cutting rates.

Renewed hope for peace between Ukraine and Russia is even more good news for markets. Oil prices were falling Monday after President Donald Trump pushed Kyiv to accept a deal to end the war by Thanksgiving. This could help ease inflationary pressures over the longer term and strengthen the case for more Fed cuts.

Also crucial for the price-growth narrative in the coming days is the producer price index $(PPI)$ due Tuesday. The key statistics were delayed by the government shutdown and will be the last inflation data before the Fed's Dec. 9-10 meeting.

While the outlook is improving, investors should remember tough talk is as much a feature of the stock market as the Thanksgiving table.

AI bubble fears may recede but valuations are still stretched and risk sentiment remains fragile. The recent plummet in Bitcoin prices may be a warning of how much hot air is out there.

There are also signs of trouble under the hood. While the S&P 500 is coming back from its 5% drop below its peak, as Morgan Stanley points out, two thirds of the largest 1,000 U.S. stocks are down more than 10%.

It's all food for thought beyond turkey.

-- Jack Denton

***Join Barron's senior managing editors Lauren Rublin and Ben Levisohn today at noon for an in-depth technical look at stocks, bonds, commodities, volatility, and economic trends with Andrew Addision, proprietor of The Institutional View research service. Sign up here.

What's Ahead for Markets in 2026? From "Liberation Day" tariffs to torrid rallies in AI stocks and gold, this year has been full of surprises. Join us on Dec. 11 at noon for discussions with investment strategists and money managers about the outlook for the economy and markets in 2026 -- and how to position your portfolio for success. Sign up here.

***

Interest Rates Should Be Higher Based on the Taylor Rule

Federal Reserve officials are publicly at odds ahead of their December meeting about whether to cut interest rates again. But behind the latest controversy is a long-simmering and arguably more important debate about how to set monetary policy: on the basis of fixed rules, or central bank officials' judgment.

   -- A rules-based approach would put the fed-funds rate significantly higher 
      than its current level, some say, while the current approach may leave 
      the markets guessing until the Fed's statement is released on Dec. 10. It 
      has already cut rates twice this year, by a quarter-point each time. 
 
   -- Both cuts were cast as "insurance" against further deterioration of the 
      labor market and the economy, while inflation is still above target. 
      Rules-based policy, versus the Fed's current data-dependent approach, 
      would put rates a third of a percentage point higher in view of the 
      inflation backdrop. 
 
   -- The fear is that lower rates heighten the risk of another surge in price 
      growth like the post-Covid surge just a few years ago. Mathematical 
      models such as the Taylor Rule, developed in the 1990s by Stanford 
      economist John Taylor, have been used for years as guidelines for setting 
      rates. 
 
   -- Taylor's rule links rates to inflation and growth and stipulates that 
      rates should be raised when inflation exceeds an established target or 
      the economy runs hotter than expected. Fed policy decisions in recent 
      months have diverged notably from what the Taylor Rule would prescribe. 

What's Next: Allianz Trade estimates that the fed-funds rate now sits roughly half a percentage point to three-quarters of a point below the level implied by a standard Taylor-rule calculation. That is the widest gap since 2022, when the Fed underestimated inflation and prices rose to a 41-year high of 9.1%.

-- Nicole Goodkind

***

White House Battles Perception It Isn't Focused on Economy

The White House wants to overcome criticism that it isn't focused enough on the so-called affordability crisis, instead focusing much of the first few months of President Donald Trump's second term on foreign policy, including import tariffs and Russia's war in Ukraine. A CBS News poll suggests Americans are frustrated.

   -- While Americans list the economy as the most important priority for Trump, 
      77% say he isn't spending enough time on it, the CBS News/YouGov poll 
      found. His approval ratings on handling the economy have fallen since 
      September, to 36% approving now, versus 41% two months ago and 51% in 
      March. 
 
   -- Officials making the Sunday talk show rounds tried to reframe things. 
      Treasury Secretary Scott Bessent said people haven't yet factored the 
      administration's tax cuts into their planning for next year, when many 
      will be getting substantial tax refunds and extra money in their pocket 
      after adjusting their withholding. 
 
   -- Bessent told NBC News that costs are coming down, listing lower interest 
      rates and a big October for home sales, lower energy and gasoline prices, 
      and even lower costs for turkey for Thanksgiving dinner. He said 
      healthcare costs were going to come down and there was an announcement on 
      that coming. 
 
   -- White House economic advisor Kevin Hassett told Fox Sunday Morning 
      Futures that people shouldn't underestimate Trump on his proposal to 
      issue $2,000 tariff dividend checks, despite analysts who say the 
      stimulus is unlikely to happen. If the money keeps coming in, Hassett is 
      sure Trump will look into it. 

What's Next: Trump surprised many with a friendly Oval Office visit by New York's mayor-elect Zohran Mamdani, who campaigned on the affordability issue. Over the weekend, Trump said on social media that his own work on the economy hasn't yet been fully appreciated: "Things are really Rockin'."

-- Liz Moyer

***

Thanksgiving Air Travel Will Be Busiest in 15 Years

Pack plenty of patience if you're traveling for Thanksgiving. The Federal Aviation Administration said that it expects air travel between Tuesday and Sunday to be the busiest Thanksgiving in 15 years, with Tuesday projected to be the busiest travel day of the period, followed by Sunday.

   -- Some 52,000 flights are planned for Tuesday, and 51,000 on Sunday. Many 
      people put off travel plans during the government shutdown, which 
      disrupted air travel, so some of these flights may have been booked last 
      minute. The FAA canceled restrictions on flights at 40 airports earlier 
      this month. 
 
   -- A major winter storm system moving east across the continental U.S. could 
      disrupt both air and road travel for much of the country this 
      Thanksgiving. Thunderstorms are expected to hit South Central states on 
      Tuesday, and rain and snow will blanket the northern Midwest, according 
      to AccuWeather. 
 
   -- Airlines are bracing for a shutdown-related hit. Fourth-quarter earnings 
      should detail the magnitude of that plus how carriers are managing routes 
      amid a nationwide shortage of air-traffic controllers that existed even 
      before the shutdown that started Oct. 1. 
 
   -- The Transportation Security Administration wants to charge an $18 fee for 
      travelers who arrive at security checkpoints without the required 
      acceptable form of identification, such as a REAL ID or passport, to 
      cover "government-incurred costs" for verifying their identity. 

What's Next: Walt Disney has a solution for people who are worried about crowded airports and roads: cruises. The entertainment company is betting big on new cruise ships, which Seaport Research's David Joyce says could add over $2.8 billion of revenue and over $500 million of operating income next year.

-- Laura Sanicola, Janet H. Cho, and Angela Palumbo

***

Universal's 'Wicked: For Good' Defies Gravity In Debut

Moviegoers gave Comcast-owned Universal's Wicked: For Good a big boost in its box office debut, bringing in record sales that defied expectations. It's the biggest ever worldwide opening for a Broadway musical, beating last year's Wicked, and could put Hollywood on track to close out the year on a strong foot.

   -- Domestic box office sales of $150 million beat forecasts, while it 
      brought in $226 million globally, according to Comscore. It was the 
      second highest-grossing opening weekend this year, after Warner Bros.' A 
      Minecraft Movie in April. 
 
   -- For studios, the weekend showing is a sign that the holiday period could 
      set it back on course after the worst October box office performance 
      since the late 1990s. Domestic ticket sales so far this year total $7.49 
      billion through Sunday, up 3.3% compared with 2024, Comscore said. 
 
   -- Hollywood is within striking distance of hitting or exceeding the $9 
      billion mark at the domestic box office for the year, said Comscore's 
      head of marketplace trends Paul Dergarabedian. Last year, it generated 
      $1.6 billion from the Friday before Thanksgiving through New Year's Eve. 
 
   -- In second place for the weekend, Lionsgate Films' crime mystery Now You 
      See Me, Now You Don't, sold $9.1 million in its second weekend. 20th 
      Century Studios' sci-fi thriller Badlands: Predator came in third place 
      in its third weekend, with nearly $6.3 million. 

(MORE TO FOLLOW) Dow Jones Newswires

November 24, 2025 06:54 ET (11:54 GMT)

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