US stocks advanced strongly on Monday, lifting major indices for a second straight session as markets steadied into the Thanksgiving holiday week. The S&P 500 rose 1.55% to 6,705.12, the Nasdaq surged 2.69% to 22,872.01 in its best performance since May, and the Dow added 202 points to close at 46,448.27.
The gains built on Friday’s rebound after expectations for a December Federal Reserve rate cut improved. Futures markets now place the probability of a quarter-point cut at just over 80%, a sharp recovery from last week’s volatility. Despite the bounce, all three major indices remain lower for the month, with the S&P 500 and Dow down about 2% and the Nasdaq more than 3% weaker.
Alphabet’s surge lifts the AI trade
Alphabet led the day’s rally, climbing 6.3% after investors reacted positively to the company’s launch of its upgraded Gemini 3 AI model. The move revived enthusiasm across AI-linked names that had come under pressure earlier in the month.
The rally spread quickly: Broadcom jumped more than 11%, Micron gained about 8%, and AMD and Palantir rose around 5%. Other megacap names, including Meta, Nvidia and Amazon, also advanced as confidence returned to the sector.
Market context and near-term risks
Even with Monday’s gains, November has been challenging for equities. High valuations across the AI complex have prompted investors to reassess expectations, while negative sentiment has amplified market swings. Thin trading volumes ahead of the holiday and limited catalysts before the Fed’s December meeting could heighten volatility.
Upcoming US data, including September retail sales and producer price index readings, will be closely watched. Any signs of stagnation combined with inflation pressures could unsettle markets in the short term.
The US stock market is closed on Thursday for Thanksgiving and shuts early at 1pm on Friday.
Australian market outlook
Australian shares are expected to follow Wall Street higher. ASX 200 futures are pointing up 36 points, or 0.4%, to 8573.
