Stocks Stage Comeback in Time for Thanksgiving. What's Behind It

[cryptobro]

It’s Thanksgiving, and you know what that means. “Hey, sweety, why don't you come here and let us know how your high-beta stocks are doing. Here’s our little investor.”

And for once, the answer isn’t followed by a sigh. Stock traders are heading into the holiday with something they haven’t had in a while — gains and optimism.

Major US indices just logged their fourth straight day of gains, with the Nasdaq Composite on pace for its best Thanksgiving week since 2008.

That’s right: the last time the Nasdaq had a holiday rally this strong, we were still explaining what a “smartphone” was.

This year, it’s all about two things:
A dovish Federal Reserve
An AI trade that refuses to sit idle
Let’s carve into what’s driving this seasonal sprint.

AI Fears Cool Off

The market has spent the past month wrestling with fears that AI stocks were puffing up like an overfilled Thanksgiving parade balloon. But this week, the anxiety faded.

Microsoft MSFT, CoreWeave CRWV, Dell DELL, and even suddenly-revived AI-adjacent names have found solid footing again. The Nasdaq IXIC jumped 0.8% on Wednesday, outpacing the other indices and reminding investors that tech still runs this town.

What changed?
No new AI scandals and bubble talk
No shocking spending pivots (thanks, Meta
META
)
No high-profile shorts announcing apocalyptic bets (thanks, Burry)
And some great data-center guidance in recent earnings (thanks, Dell
DELL
)
Even Nvidia
NVDA
, which has been under the most scrutiny, clawed back 1.4% Wednesday — though the stock is still well off its early-month peak.

Investors are clearly reshuffling their AI winners, but the trade lives on. A shakeout doesn’t mean a shutdown.

🟩 Breadth Returns: Not Just a Tech Party

All but two sectors of the S&P 500
SPX
moved higher Wednesday, pushing the broader index up 0.7%.

The Dow
DJI
matched that performance, rising 315 points, with both indices tracking for their best Thanksgiving week since 2012.

Even the defensive sectors joined in. When utilities and consumer staples start partying with semiconductors and mega-cap tech, you know sentiment’s shifting.

The Fed Is Quietly Setting the Table

Just a week ago, the odds of a December rate cut were a coin toss — roughly 50/50 according to CME FedWatch. Today, that probability has surged to more than 80%.

What a cut could mean to traders:
Cheaper borrowing
Higher valuations
Softer financial conditions
And fewer landmines in the months ahead
Nothing gets markets into the holiday spirit like the smell of potential rate cuts.

This week is also shortened — stock markets are closed Thursday and shut early Friday (ref: the economic calendar). With fewer trading hours to log, investors often front-load their optimism or their panic. This time, it’s mostly optimism.

Nvidia Isn’t Gone — It’s Just Taking a Breath

Nvidia’s stock remains sharply lower from its early November highs, but Wednesday’s move showed there’s still life in the AI leader.

Meta
META
, Alphabet
GOOGL
, and select cloud names have picked up flows as traders diversify their AI bets.

And while Nvidia might not be the main driver of the rally this week (spoiler alert: it’s Google), its ability to stay positive helped prevent any emotional selling from spreading through tech.

🧁 The Warm, Lightly-Toasted Takeaway

If you were expecting a quiet, uneventful lead-in to the holidays — the market apparently had other plans.

Here’s where we’re at now:

A four-day winning streak,
A revival in Big Tech,
A broad rally across sectors,
And Fed expectations suddenly swinging toward cuts.

[Nahid Hossen]

Macro relief plus optimism—perfect recipe for a holiday rebound.

[Abdul Khan]

Market sentiment flips fast when liquidity improves ahead of holidays.