Traders work on the floor of the New York Stock Exchange (NYSE) on November 20, 2025 in New York City.
Spencer Platt | Getty Images News | Getty Images
U.S. equities rebounded Friday after New York Federal Reserve President John Williams suggested the central bank could cut rates again in December.
The Dow Jones Industrial Average gained 225 points, or 0.5%. The S&P 500 gained 0.4%, while the Nasdaq Composite rose 0.2%.
The comments by a notable Fed member like Williams broke the equity market out of its artificial intelligence-stock slump and raised traders’ bets that the central bank would in fact cut next month for the third time this year. Fed funds futures traders are currently pricing in a more than 70% chance of a quarter percentage point cut, a spike from the 39.1% likelihood priced in the day before, according to the CME FedWatch tool.
“I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions,” Williams said in remarks for a speech in Santiago, Chile. “Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals.”
AI stocks, which were headed for another tough session before Williams’ comments, cut their losses in premarket trading. Nvidia and AMD both turned positive. Investors hope easier monetary policy can revive a sluggish economy and justify historically high tech-stock valuations.
Stock benchmarks are coming off a brutal market reversal in the last session and are still headed for big losses this week. The Dow at one point on Thursday rose more than 700 points as investors cheered a blockbuster Nvidia fiscal third-quarter earnings report. The benchmark, along with the S&P 500 and Nasdaq Composite, ended the day sharply lower as the Nvidia rally fizzled and worries grew that the Fed would stand pat in December on rates.
The S&P 500 is still down more than 2% week to date, while the Dow has declined almost 3%. The Nasdaq has shed around 3%.
Some investors believe that Thursday’s market dip is not a sign of a deeper decline, but rather a normal pullback following strong gains earlier in the year.
“At the start of the month things were getting a tad frothy, but now with the past three weeks of frustration for investors, various signs of sentiment are flashing extreme levels of fear and worry. From a contrarian point of view, this was necessary to shake out any weak hands,” said Ryan Detrick, chief market strategist at Carson Group.
On Friday, bitcoin dropped nearly 2%, putting its week-to-date losses at around 10%. The cryptocurrency has fallen to levels not seen since April as investors have pulled back on their risk-taking in the market.