US Stocks Rise on Rate-Cut Hopes, Black Friday Boosts Retail

November 28, 2025 at 19:31 UTC

5 min read

US stock market gains visualization with retail sales and Fed rate-cut optimism, US stocks

Key Points

US stock markets closed higher on a shortened Black Friday session, with the Dow, S&P 500, and Nasdaq posting gains to end a volatile November.
The Chicago Mercantile Exchange (CME) experienced a data center outage early Friday, disrupting futures and options trading until 8:30 a.m. ET, but markets recovered after reopening.
Investor optimism for a Federal Reserve interest rate cut in December fueled a rally, despite November marking the first monthly loss for the Nasdaq since March and a cooling in AI-driven tech stocks.
Holiday shopping activity remained strong, with record projections for Thanksgiving through Cyber Monday spending, benefiting retail stocks and related ETFs.

Market Performance and November Overview

On Friday, November 28, 2025, US stock markets rose modestly during a shortened trading session following the Thanksgiving holiday, closing early at 1 p.m. ET. The Dow Jones Industrial Average increased by approximately 0.6%, adding 289 points to close near 47,716, while the S&P 500 gained 0.5%, finishing at 6,849. The Nasdaq Composite rose 0.7%, closing around 23,366. These gains marked the fifth consecutive day of increases for the major indexes, capping a volatile month. Despite the late-month rally, November was challenging for the tech-heavy Nasdaq, which recorded its first monthly loss since March, down about 2%, snapping a seven-month winning streak. The S&P 500 also ended November slightly lower by 0.6%, breaking a six-month winning streak, while the Dow remained roughly unchanged for the month. Year-to-date, the S&P 500 was up 16.4%, the Dow 12.2%, and the Nasdaq 21%, reflecting strong gains over the course of 2025.

Impact of CME Group Outage on Trading

Early on Black Friday, the Chicago Mercantile Exchange (CME) experienced a significant technical disruption caused by a cooling issue at a data center operated by CyrusOne. This outage halted trading in futures and options markets, including contracts for US indexes, Treasurys, gold, and oil. The disruption lasted until 8:30 a.m. ET, delaying the start of futures trading and reducing overall market volume on what was already expected to be a quiet trading day due to the holiday-shortened session. Despite the outage, individual stock trading was unaffected, and markets quickly resumed normal operations after the CME markets reopened. The outage compounded the low activity typical of Black Friday trading but did not prevent the major indexes from posting gains by the close.

Federal Reserve Rate-Cut Expectations Drive Rally

Investor sentiment improved significantly during the week leading up to Black Friday, driven by growing expectations that the Federal Reserve would cut interest rates at its December meeting. Market participants increased their bets on a rate reduction to around 87%, according to CME’s FedWatch tool. This anticipation of lower borrowing costs supported a rally in growth-oriented stocks, particularly those linked to artificial intelligence (AI) investments. However, the month of November saw a reassessment of AI-driven tech companies, with concerns about the sustainability of their earnings growth contributing to volatility and a pullback in megacap tech shares such as Nvidia, which closed the month with a double-digit loss. Despite this, the renewed faith in AI and the prospect of easier monetary policy helped stabilize the market and fuel the late-month gains.

Robust Holiday Shopping Boosts Retail Sector and ETFs

The Thanksgiving weekend, including Black Friday and Cyber Monday, continued to be a critical period for retail sales, with strong consumer participation expected to support the sector. The National Retail Federation forecasted a record 186.9 million shoppers between Thanksgiving and Cyber Monday, surpassing last year’s 183.4 million. Retailers like Walmart, Target, Amazon, and Macy’s saw their shares rise ahead of the shopping surge, with Walmart notably gaining over 1% on Black Friday. Surveys indicated that while some consumers planned to reduce spending, overall participation remained high, with 82% of surveyed shoppers intending to shop during the holiday weekend. Millennials and Gen Z were leading spending increases, with average expenditures rising compared to 2024. The rise in online shopping and payment options such as 'buy now, pay later' also benefited technology and payment-processing ETFs. Retailers adopted tighter discount strategies to protect margins, although aggressive pricing by Walmart pressured competitors to match deals. The holiday shopping season, which typically accounts for about one-third of annual retail profits, was poised to reach over $1 trillion in sales for the first time.

Broader Market Indicators and Analyst Outlook

Market breadth improved notably in late November, with indicators such as the five-day average of S&P 500 advancers minus decliners rebounding from negative territory to positive levels, signaling broader participation beyond a narrow group of stocks. Goldman Sachs highlighted this shift as evidence of reduced market stress and a 'cleaner' setup heading into December. Volatility measures also declined from early November highs. Analysts from Deutsche Bank projected the S&P 500 could reach 8,000 by the end of 2026, representing an optimistic outlook, while HSBC and JPMorgan forecasted the index to hover around 7,500. Treasury yields remained relatively stable near their lowest levels since late October, and commodities such as gold and silver rallied, partly due to supply constraints and expectations of Fed rate cuts. Bitcoin recovered from recent declines, trading above $90,000 but well below its October peak. Overall, the market entered December with cautious optimism, balancing the potential benefits of monetary easing against ongoing concerns about tech sector earnings and economic conditions.

Key Takeaways

US stock markets ended a volatile November with gains on Black Friday, supported by hopes for a Federal Reserve rate cut in December.
A CME Group data center outage temporarily disrupted futures and options trading but was resolved early in the trading day without lasting market impact.
Despite a monthly loss for the Nasdaq and cooling enthusiasm for AI stocks, investor confidence improved, driving a late-month rally.
Strong holiday shopping forecasts and consumer participation bolstered retail stocks and related ETFs, highlighting the importance of the Thanksgiving weekend for the economy.