Alphabet Surges as AI Lead Widens
On Tuesday, Alphabet shares jumped toward a $4 trillion market value after weeks of gains fueled by its new Gemini 3 AI model and growing demand for its in-house Tensor Processing Unit chips. Reuters said the stock was up 4.1% in premarket trading, putting it on course to breach the milestone at the open, while Business Insider noted the shares are up nearly 70% this year as investors re-rate Google’s AI prospects.
Gemini 3’s strong launch has eased worries that Google was trailing OpenAI, with benchmark tests showing the model outperforming rivals in coding, design, and analysis. At the same time, Google is pushing its TPUs through its cloud unit and is in talks on a multibillion-dollar chip deal with Meta, according to reporting on Google’s chip push, a move that could gradually chip away at Nvidia’s AI hardware dominance.
The rally also reflects reduced regulatory overhang after Google escaped severe penalties in a major search antitrust case, plus a new $4.3 billion stake from Warren Buffett’s Berkshire Hathaway that many see as a strong vote of confidence. For markets, Alphabet’s surge concentrates even more index weight in mega-cap tech and intensifies the rotation within the AI trade away from pure chip plays toward platform and cloud owners with full AI “stacks.”
Crypto Rout Tests Wall Street Exposure
Over the past six weeks, the crypto market has shed roughly $1 trillion in value, with Bitcoin dropping about 30% from its early October record near $126,000 to below $81,000 before a modest rebound, according to CNN’s overview of the crash. The slide was triggered by an October 10 flash crash tied to renewed Trump tariffs on China, which sparked panic selling and forced liquidations across heavily leveraged positions.
Unlike past “crypto winters” driven mainly by retail speculation, this downturn is unfolding amid much heavier institutional participation, including spot Bitcoin ETFs approved in 2024 and allocations from asset managers, university endowments, and even central banks. As the New York Times’ DealBook team noted, mainstream money treats Bitcoin as a high-beta, macro-sensitive asset, so rising rate uncertainty and fears of an AI bubble have amplified selling rather than cushioning it.
Deutsche Bank analysts argue this makes recovery harder. Crypto usage among retail traders has slipped, and institutional ETF flows can accelerate outflows when volatility spikes, thinning liquidity just when it is most needed. For broader markets, the key risk is not crypto itself, but whether hidden leverage or cross-collateralization forces selling in other risk assets if Bitcoin’s bear market deepens.
Consumers Turn Gloomy as Data Lags
Tuesday’s release of delayed economic data showed a U.S. consumer backdrop that is weakening at the margins even as headline growth remains solid. September retail sales rose just 0.2% versus expectations for 0.3% to 0.4%, and “control group” sales that feed GDP actually fell 0.1%, according to Reuters’ breakdown of the report. Once September’s 0.3% CPI increase is factored in, real retail spending edged down, signaling consumers entered Q4 on softer footing.
At the same time, the Conference Board’s Consumer Confidence Index dropped to 88.7 in November, its lowest since April, with both current conditions and expectations deteriorating. Surveys from the Associated Press and CNBC highlight that concerns about jobs, persistent inflation, tariffs, and the recently ended 43-day government shutdown are all weighing on sentiment across income and political groups. Yet high-income households are still spending and supporting aggregate consumption, while lower- and middle-income consumers feel more squeezed, creating what economists describe as a K-shaped pattern.
The shutdown has also distorted the data flow. Agencies missed key October readings and will publish only partial CPI and no standalone October jobs report, folding those figures into November’s release instead. That leaves policymakers and investors navigating with backward-looking indicators from September and survey data from just after the shutdown, increasing the odds of misreading momentum as the crucial holiday spending season ramps up.
Bond Market Bets on December Fed Cut
This week, U.S. Treasury trading has reinforced market conviction that the Federal Reserve will cut rates again in December, despite noisy inflation signals. The 10-year yield briefly slipped below 4% for the first time in almost a month, after New York Fed President John Williams signaled he could support a cut at the next meeting, according to a Wall Street Journal live update. Futures markets now price in roughly an 80–85% chance of a quarter-point move.
Shutdown-delayed producer price data complicate the picture. Headline PPI for September rose 0.3% month on month and 2.7% year on year, while core PPI excluding food and energy increased a milder 0.1% on the month and 2.6% annually, the lowest in over a year. That combination suggests underlying price pressures are easing even as volatile categories like fuel and food remain elevated. Treasury Secretary Scott Bessent publicly urged the Fed to cut, arguing that the prolonged shutdown has already weakened the economy and that officials should focus less on public commentary and more on listening to rate-sensitive households and businesses.
With much October data missing and consumer confidence sliding, the Fed is effectively setting policy using stale hard data and real-time sentiment. Traders are also watching the White House’s search for a new Fed chair, with National Economic Council Director Kevin Hassett seen as a dovish front-runner. A confirmation of a more pro-cut leader could reinforce the rally in Treasuries and growth stocks, but it also raises the risk that the Fed underestimates any renewed inflation if energy or food shocks persist.
Signals To Track Into Year-End
- Monitor November and December consumer confidence and early holiday sales reports for signs that the confidence-spending disconnect is closing, particularly among middle- and lower-income households.
- Watch the 10-year Treasury yield around the 4% level; a sustained move lower would confirm markets are leaning into a multi-cut Fed path for 2026.
- Track shutdown-delayed inflation prints like September PPI for evidence that core price pressures keep easing even if food and energy stay volatile.
- Follow the Fed’s December meeting odds and the White House’s Fed chair decision, which together will shape the 2026 rate trajectory and risk appetite.
- Keep an eye on Bitcoin’s price and flows into spot ETFs as a proxy for institutional risk appetite and possible spillovers from the crypto rout into other assets.
