Review & Preview: Who Needs AI?

Nov 25, 2025 19:44:00 -0500 by Megan Leonhardt | #Markets #Review & Preview

Still Sour on AI. It turns out stocks can still rise without the vaunted artificial intelligence trade.

The Dow Jones Industrial Average rose 664 points, or 1.4%, and the S&P 500 gained 0.9% despite down days from AI stalwarts Advanced Micro Devices (-4.2%), Nvidia (-2.6%), and Oracle (-1.6%).

Even the tech-heavy Nasdaq Composite managed to rise 0.7%, thanks to a broader rally in the market.

Economically sensitive stocks led the way. Home builders Lennar and D.R. Horton were up 6.6% and 5.8%, respectively. Retailers Best Buy, Lululemon Athletica, and Home Depot were each up at least 4% on the day.

Best Buy reported strong quarterly earnings and raised its outlook for the holiday season.

For those interested in the horse race at the Federal Reserve, it looks like the Trump administration is making progress on its next chair.

The second round of candidate interviews concluded today, according to Treasury Secretary Scott Bessent. Five candidates are said to remain. President Donald Trump is expected to make a decision in late December, well before Jerome Powell’s chairmanship expires in May.

During the course of his interviews with candidates, Bessent has said he believes the next Fed chair could change a lot more than just interest rates, my colleague Matt Peterson reports. The central bank has a large role in regulating the economy in addition to its rate-setting decisions and that authority could be up for an overhaul under a new chair.

Company

Last

Chg

Chg%

Dow Jones Industrial Average

47,427.12

314.67

0.67%

S&P 500 Index

6,812.61

46.73

0.69%

NASDAQ Composite Index

23,214.69

189.10

0.82%

Market Data as of

The Hot Stock: Keysight Technologies +10.0%
The Biggest Loser: Advanced Micro Devices -4.2%

Best Sector: Healthcare +2.3%
Worst Sector: Energy -0.6%

Created with Highcharts 9.0.1Tuesday, Nov. 25Index performanceSource: FactSetAs of Nov. 28, 2:15 p.m. ET

Created with Highcharts 9.0.1Nov. 2800.10.20.30.40.50.60.70.8%Nasdaq CompositeDow industrialsS&P 500

Not Changing Hearts & Minds

The Bureau of Labor Statistics and the Census Bureau released more of its long-delayed September data on Tuesday, but the reports won’t do much to change hearts and minds at the Federal Reserve.

The Federal Open Market Committee is set to meet Dec. 9-10 to determine the path of monetary policy. There appears to be a fierce debate over whether persistently above-target inflation or a weak labor market is the greater risk to economy—and about how the Fed should respond.

The results of the September retail sales report and producer price index were a mixed bag and won’t provide much clarity. “The data today I don’t think really will sway anyone in any way, unfortunately,” Citi economist Veronica Clark tells Barron’s. “If anything, you could kind of look at everything we got this morning and say it’s marginally on the more dovish side.”

The producer price index for total final demand rose 0.3% in September, a notable advance from August’s 0.1% decline. But core PPI, which economists and Fed officials tend to prefer, only advanced 0.1% on the month in September. Economists now estimate the core personal consumption expenditures price index will rise 0.2% month over month in September, though a 0.3% isn’t out of the question. Either way, that’s a fairly moderate read, even if annually the Fed’s preferred core inflation is likely still running at 2.8%.

“That’s not exactly alarming, but it’s also not likely to assuage the hawks,” says Stephen Stanley, Santander’s chief U.S. economist.

September retail sales, meanwhile, only increased at a pace of 0.2% in September. That’s notably softer than the 0.6% monthly in August. But it comes after a couple months where consumer spending was strong. On average, expenditures should still translate to solid third-quarter GDP growth.

So which coming releases could change Fed officials’ minds about the economy? The best bet comes from tomorrow’s Beige Book along with ongoing data on the number of Americans filing for initial unemployment benefits.

Although the latest Beige Book is expected to again depict muted economic activity across the 12 regional Fed districts, LPL Financial’s chief economist Jeff Roach will be looking to see if there is any shift in businesses’ willingness to eat the cost of tariffs. Economists will also be looking for (and likely counting) the number of layoff mentions across the districts.

Meanwhile, initial jobless claims will likely be the first indicator of a turning point in the labor market. “If anything is really dramatically changing in terms of the labor market getting weaker, we would probably see it there, but they’re not flashing red yet or anything,” Clark says.

The Calendar

Deere reports earnings tomorrow.

The Census Bureau releases the durable goods report for September. Economists forecast a 1% month-over-month increase in new orders for durable manufactured goods, following a 2.9% gain in August.

The Fed releases the beige book for the eighth and final time this year. The report gathers anecdotal information on current economic conditions from the 12 regional Federal Reserve Banks.

What We’re Reading Today

What’s Ahead for Markets in 2026? Join Barron’s virtual roundtable on Dec. 11.

From “Liberation Day” tariffs to torrid rallies in AI stocks and gold, this year has been full of surprises. Join us for discussions with investment strategists and money managers about the outlook for the economy and markets in 2026—and how to position your portfolio for success.