U.S. stock markets opened Tuesday, November 25, 2025, with a palpable sense of caution. As the Thanksgiving holiday approached, the usual cheer was tempered by uncertainty, with futures for major indices—Dow, S&P 500, and Nasdaq 100—all edging lower. According to Investing.com, Dow futures slipped by 42 points (0.1%), S&P 500 futures fell 7 points (0.1%), and Nasdaq 100 futures dropped 46 points (0.2%). The immediate culprit? A slate of delayed but closely-watched economic data and a Federal Reserve that remains deeply divided on its next move.
Investors found themselves at a crossroads, waiting for key metrics like retail sales and producer price growth for September. These figures, delayed by a record-long federal government shutdown, were finally due for release. The shutdown had left both markets and policymakers in the dark, depriving them of the data needed to make informed decisions on investments and borrowing costs. As a result, the numbers only cover September, and many analysts warned that the economic landscape may have shifted since then—raising the stakes for interpreting these outdated but still influential readings.
But economic data wasn’t the only thing on investors’ minds. The debate over the Federal Reserve’s next steps has reached a fever pitch. The publication of the Fed’s minutes revealed a sharp decrease in the market’s expectation for a 25-basis-point rate cut at the December meeting—falling from about 75% earlier in the month to just 37%, as reported by Funds Society. Only 10 of 19 Federal Open Market Committee (FOMC) members supported cuts in both October and December, underscoring the lack of consensus. The minutes also signaled increased concern over a possible inflation rebound, with some Fed members emphasizing the need to keep inflation under control and others more focused on the risks of economic slowdown.
Torsten Slok, chief economist at Apollo, weighed in on the debate, telling Seeking Alpha that demand-driven inflation is likely to keep U.S. interest rates elevated for an extended period. Slok’s view is hardly isolated; it reflects a broader concern among policymakers and investors that persistent inflation pressures could delay any rate cuts, even as the labor market shows signs of both resilience and strain.
The September employment report did little to settle the Fed’s internal debate. According to Funds Society, the U.S. economy added 119,000 jobs in September—beating expectations—with gains in healthcare, food and beverages, and social assistance. However, revisions to July and August subtracted 33,000 jobs, and the three-month moving average rose to 62,000 new payrolls. The labor force participation rate ticked up to 62.4%, while unemployment crept higher to 4.44%, just above the Fed’s year-end target of 4.4%. In short, the labor market is sending mixed signals, leaving plenty of room for both hawkish and dovish interpretations.
The split within the Fed is perhaps best illustrated by the contrasting views of Kansas Fed President Schmid and Governor Christopher Waller. Schmid, who voted against the October cut, maintains that inflation remains a broad and persistent issue, with growth and employment still reasonable. Waller, on the other hand, is more concerned about the risk of an economic slowdown. Their debate encapsulates the central question facing the Fed: Should the focus be on stamping out inflation, or on avoiding excessive damage to employment and credit?
Despite the uncertainty, some analysts see glimmers of stability. According to Investing.com, analysts at Vital Knowledge noted that, "Money isn’t exiting AI but instead shifting," as investors pour capital into Google and Broadcom, betting on Google’s new Gemini model and AI-optimized processors. This rotation, they argue, brings "a bit more comfort in the prospect of a year-end rally," though volatility remains a constant companion. The market, they say, may be cautious, but it’s not running for the exits—at least, not yet.
Meanwhile, the artificial intelligence (AI) sector continues to dominate headlines and investor attention. Nvidia’s recent earnings report became something of a referendum on the so-called AI bubble. CEO Jensen Huang was unequivocal: "Demand for AI infrastructure continues to exceed our expectations." According to Funds Society, Nvidia claims it has visibility on about $500 billion in potential revenue from its Blackwell and Rubin platforms through the end of 2026. Data center revenue soared by 66%, and networking revenue jumped 162%, reinforcing Nvidia’s role as not just a chipmaker, but the architect of AI data centers. These results have quieted, at least temporarily, fears of an imminent slowdown in AI investment.
Yet, the AI ecosystem is evolving rapidly. Google, long content to keep its custom tensor processing units (TPUs) in-house, is now pitching them for use in customers’ own data centers, a major strategic shift. The Information reported that Meta Platforms—the parent of Facebook and Instagram—is in talks to spend billions integrating Google’s TPUs starting in 2027. Meta also plans to rent TPU capacity from Google Cloud as early as next year. This move positions Google as a serious challenger to Nvidia’s dominance, and as Investing.com noted, shares of Alphabet rose in premarket trading, while Nvidia slipped just over 2%.
AI software is also proving to be a lucrative and competitive space. Alphabet has increased prices for its Gemini 3 Pro AI software by about 20%, countering the narrative that AI tools are being commoditized. Nearly half of U.S. companies now pay for AI tool subscriptions, according to Funds Society, suggesting a growing base of recurring revenue. Bernstein’s recent report even challenges the notion that GPU hardware quickly becomes obsolete, arguing that depreciation horizons are closer to six years than two—good news for investors worried about capital expenditures outpacing returns.
Corporate earnings continue to reflect the AI boom’s impact. Dell Technologies was set to report after the bell, and expectations were high: the company has nearly doubled its annual profit growth target for the next four years, now forecasting at least 15% growth in adjusted per-share profit and revenue growth between 7% and 9%. Dell’s servers are in hot demand, powering AI models for clients like CoreWeave and Elon Musk’s xAI. Still, analysts warn that fierce competition and the high costs of building these servers could pressure profit margins.
Elsewhere, Alibaba and Analog Devices were also scheduled to report, keeping the earnings calendar busy as the quarter draws to a close.
For now, the mood on Wall Street is one of cautious optimism. The AI investment cycle shows no signs of collapsing in the next 12 months, and the project pipeline remains robust. As Funds Society observed, the debate is less about whether AI will continue to grow and more about the pace of that growth. The S&P 500 and other indices may be in for more volatility, but with money shifting rather than fleeing, and with companies like Nvidia, Google, and Dell all making big bets on AI, the broader narrative is one of transformation rather than retreat.
As investors and policymakers alike await fresh data and the Fed’s December decision, the only certainty is that the next few weeks will be anything but dull. The delicate balance between inflation, interest rates, and technological innovation is shaping not just the markets, but the future of the economy itself.
