Alphabet Surges on AI Momentum
On Tuesday, Alphabet shares pushed toward a $4 trillion market value as excitement over its Gemini 3 AI model and custom chips ignited a powerful rally. Reuters reported that the stock was up about 4% in premarket trading, extending a year-long run that has lifted the shares nearly 70% as investors reprice Google’s AI prospects and search resilience.
The rally reflects multiple tailwinds. A new Business Insider deep-dive said Gemini 3’s strong performance, Google’s in-house TPU chips, a favorable antitrust ruling, and a new Berkshire Hathaway stake have all reinforced confidence in the company’s long-term earnings power. The stock has also benefited from a broader Big Tech rebound as markets bet on more Fed rate cuts.
Google’s chip strategy is rippling across markets. Its push to sell TPUs through Google Cloud and reports of potential billion‑dollar deals with large customers such as Meta have raised fears that demand could shift away from Nvidia’s GPUs, a factor that pressured Nvidia and other chip stocks. At the same time, Nvidia is pushing back, telling investors its technology remains “a generation ahead,” underscoring how central AI infrastructure has become to equity valuations.
For investors, Alphabet’s surge highlights a rotation within the AI trade rather than a retreat from it. Profit expectations now hinge not just on model quality but on who controls the full AI stack, from chips and cloud to search and ads. That intensifies competitive risk for other AI leaders and raises the stakes around any change in the interest-rate outlook that could compress lofty tech multiples.
Crypto Crash Tests Wall Street Nerves
Since early October, the crypto market has shed around $1 trillion in value, with bitcoin falling roughly 30% from a record near $126,000 to the low $80,000s before a modest rebound. CNN noted that this is shaping up as one of crypto’s worst months since the 2022 “winter” that followed the collapse of FTX, and analysts are unsure whether prices have bottomed.
This downturn looks different from prior crashes. Deutsche Bank analysts, cited by Business Insider and CNN, argue that the selloff is being driven less by retail speculation and more by institutional money and macro forces. Spot bitcoin ETFs, approved in 2024, brought mainstream investors and leverage into the market. When October’s tariff‑driven flash crash triggered margin calls, forced selling cascaded through both crypto-native venues and traditional portfolios.
Macro anxiety is amplifying the pain. Investors are wrestling with uncertainty around the Fed’s next rate cut and growing suspicion that parts of the AI trade are in a bubble, leaving risk assets broadly out of favor. Bitcoin, long a proxy for liquidity and risk appetite, is now more tightly linked to Wall Street flows as asset managers like BlackRock and Fidelity, and even institutions such as Harvard’s endowment, hold sizable positions. That raises the chance that a deeper crypto slide could spill over into other markets via de‑risking and tightened financial conditions.
For diversified investors, the message is twofold. Crypto is behaving more like a high‑beta mainstream asset than an uncorrelated hedge, and thinner liquidity makes sharp swings more likely. Portfolio risk management around leverage, collateral and cross‑asset margining matters more than ever if volatility accelerates into year‑end.
Consumers Turn Gloomy as Data Lags
On Tuesday, the Conference Board’s Consumer Confidence Index fell to 88.7 in November, its lowest reading since April, as Americans reacted to the recently ended 43‑day government shutdown, stubborn inflation and a softening job market. Both AP and CNBC reported that views deteriorated across income and political groups, with the expectations index dropping sharply and more respondents saying jobs are “hard to get.”
The timing matters. The survey ran through November 18, just days after the shutdown cut pay to federal workers, disrupted contracts and snarled air travel. At the same time, private data from ADP showed average weekly job losses over the past month, and other surveys like the University of Michigan gauge confirmed weakening sentiment. Economists quoted by Jefferies and others see rising downside risks to spending, even as they caution that consumption has often diverged from confidence in recent years.
Hard data paints a mixed picture. Shutdown‑delayed reports showed September retail sales rose just 0.2%, missing forecasts and turning negative in real terms once inflation is accounted for. Spending cooled in discretionary categories such as electronics, clothing and sporting goods, while wealthier households kept overall consumption afloat. This “K‑shaped” pattern, where higher‑income consumers keep spending and lower‑income families struggle with prices, is contributing to widespread public frustration with the economy despite solid headline GDP.
For the holidays and early 2026, the key question is whether anxiety finally curbs actual outlays. Early reports from retailers like Best Buy suggest brand‑driven and high‑income demand remains resilient, but economists at firms including Wells Fargo and BMO warn that moderating job gains and compounding price increases could sap momentum. If confidence stays depressed and labor data softens, pressure will grow on policymakers to support growth, even as incomplete government statistics make the true state of the economy harder to read.
Fed Cut Bets Push Yields Lower
This week, U.S. Treasury yields have drifted down again as markets grow more confident that the Federal Reserve will cut rates in December and possibly keep easing into 2026. The 10‑year note briefly slipped below 4% on Tuesday, its first break of that level in nearly a month, according to the Wall Street Journal, while Bloomberg reported it touched lows near 4.03% in a three‑day rally.
The catalyst is a combination of dovish Fed rhetoric and softer data. New York Fed President John Williams and San Francisco Fed President Mary Daly signaled openness to a near‑term cut, which, alongside shutdown‑delayed reports showing modest wholesale inflation and weaker retail sales, encouraged traders to mark down the expected policy path. CME FedWatch now shows markets pricing an 80–85% chance of a quarter‑point cut in December, a sharp rise from roughly 50% a week earlier.
Politics are adding another twist. Treasury Secretary Scott Bessent told CNBC that President Trump has a “very good chance” of naming a new Fed chair before Christmas, with National Economic Council director Kevin Hassett seen as the frontrunner and favored by allies for his preference for lower rates. That prospect reinforces expectations for an easier stance, even as some Fed officials worry that robust productivity and solid pre‑shutdown GDP complicate their assessment of how much support the economy really needs.
Lower yields help ease financial conditions for households and companies, supporting equities and housing affordability at the margin. But they also reflect rising concern that growth could slow more sharply if consumer fatigue and labor‑market cooling deepen. Investors are effectively betting that the Fed will err on the side of cushioning downside risks, despite incomplete data and ongoing inflation above the 2% target.
Signals To Track Into Year‑End
- Monitor the December Fed meeting odds via tools like CME FedWatch as markets increasingly price in a quarter‑point rate cut and react to hints about the 2026 path.
- Watch upcoming, shutdown‑delayed September PPI and revised CPI data for signs that wholesale and consumer inflation are re‑accelerating or staying near 2.5–3%.
- Track holiday retail sales and control‑group spending to see whether November’s confidence slump translates into weaker real consumption.
- Keep an eye on labor‑market indicators such as ADP payroll estimates and job‑availability surveys given emerging weekly job losses and rising unemployment.
- Follow bitcoin and broader crypto price swings as a gauge of risk appetite and potential stress transmission from leveraged digital‑asset positions into traditional markets.
