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Markets surge despite tech sector shake-up

United States (US) stock markets finished higher on Friday, buoyed by growing confidence that the Federal Reserve (Fed) will cut rates at its 10 December Federal Open Market Committee (FOMC) meeting. In a holiday-shortened week, the Nasdaq 100 surged 4.93%, the S&P 500 gained 3.73%, and the Dow Jones added 1,471 points, or 3.18%.

While all three indices ended the week positively, November’s overall performance was mixed. The S&P 500 and the Dow Jones posted monthly gains, but the Nasdaq 100 snapped a seven-month winning streak, falling by 1.64% in November.

This was largely due to a 12.59% drop in index heavyweight NVIDIA to $177.00, marking its worst month since March. Investors rotated out of the AI chip leader into Alphabet, which surged 13.59% last month to $320.12.

The switch, which appears to have further to run, is being driven by Google Cloud’s 34% revenue surge, fuelled by explosive tensor processing unit (TPU) demand and further boosted by the recent Gemini 3 launch – Google’s most capable multimodal model, optimised for TPU clusters and instantly rolled out across Search.

Key data releases this week

Looking ahead, this week will feature the following releases:

We will monitor the ISM services PMI closely (previewed below), given that services account for approximately 70% – 75% of US gross domestic product (GDP) and the insights it provides into the current state of the labour market.

Although this week is a Fed blackout period, a few key speaking engagements are scheduled: Powell is set to speak on Monday at a memorial event, while Bowman will testify before the House Financial Services Committee on Thursday.

ISM services PMI

Date: Thursday, 4 December at 2.00am AEDT

October’s ISM services PMI delivered a strong upside surprise, rising to 52.4 from 50.0 in September and exceeding consensus expectations of 50.8, the strongest expansion since February 2025.

The only notable weak spot was employment, which remained in contraction at 48.2 (though slightly improved from September’s 47.2), with respondents continuing to express caution around headcount growth despite broader improvement.

Attention now turns to the November release. Consensus anticipates a modest increase to 52.7, but markets will be particularly focused on whether employment weakness persists. If it does, it will reinforce the roughly 86% probability currently priced in for a 25 basis point (bp) rate cut at the 10 December FOMC meeting.

ISM services PMI chart