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Thanksgiving week 2025 market outlook: Volatility dents recent highs

Thanksgiving week 2025 market outlook: stocks enter the holiday stretch after the sharpest intraday swings since April, with the vix above 20. Reuters and AP report the S&P 500 is about 4% off its record, while the Nasdaq is roughly 7% below recent peaks, recent gains have been dented by turbulence.

Here’s the twist: elevated volatility already met strong results from Nvidia, yet the ai stocks selloff deepened. As Reuters and the Wall Street Journal noted, AI winners led declines despite upbeat numbers.

Traders say the tone can shift fast in thin markets. Nevertheless, the unusually flat VIX futures curve is another reason for caution, according to Reuters.

Timeline: Data releases and holiday trading hours

In this Thanksgiving week 2025 market outlook, the calendar is front‑loaded. Tuesday brings the delayed September retail sales and PPI, per Reuters and Investopedia.

Wednesday adds jobless claims, durable goods orders, the Chicago PMI, and the Fed’s Beige Book, according to Investopedia. Agencies are still catching up on some reports from earlier delays, so timing matters.

U.S. markets close Thursday and observe holiday-shortened trading hours on Friday. Stock trading ends at 1 p.m. ET, while bonds close at 2 p.m. ET, Investopedia notes. These holiday-shortened trading hours often thin liquidity.

Black Friday/Cyber Monday: Gauging consumer strength

Black friday consumer spending is the near‑term swing factor. Reuters highlights the National Retail Federation’s call for 3.7%–4.2% holiday sales growth, topping $1 trillion.

But consumers look more price sensitive, and deals have started earlier. Therefore, the first read on black friday consumer spending and Cyber Monday will feed sentiment quickly.

You might be surprised that resilient spend can calm markets. Conversely, a soft checkout pulse could amplify the week’s jitters.

Rates watch: Fed path remains uncertain

All eyes stay on the fed december rate decision odds. Reuters said futures recently leaned toward no December move, and Morgan Stanley dropped its December cut call.

However, AP noted CME data showing nearly a 72% chance of a December cut at one point. According to NY Fed President John Williams, there is “room for a further adjustment.”

As a result, conflicting signals keep policy uncertainty elevated. Heading into the fed december rate decision, rate‑sensitive sectors could see whiplash as headlines hit. Consequently, any surprise speech or data may move both yields and equities.

AI-led tech weakness adds to choppiness

AI enthusiasm isn’t a straight line. Reuters and the Journal said Nvidia’s strong results failed to sustain a rally as the ai stocks selloff spread. Crypto‑exposed names felt pressure too, the Journal added.

Consequently, high‑beta names magnified swings. But any stabilization in chips could help sentiment.

What no one is mentioning: leadership reversals can accelerate in thin tape. Therefore, watch broader mega‑cap moves, not just one print.

Positioning and valuation signal caution

JPMorgan sees retail “buy‑the‑dip” interest fading, Reuters reported. Meanwhile, forward P/E multiples still sit above their 10‑year averages. Valuation worries have weighed on November performance, Reuters added.

Moreover, the first 5% pullback in 149 days hit recently. So, dip‑buyers may be more selective into year‑end.

That setup can reward patience. Yet it also raises realized volatility when headlines hit.

Thanksgiving week 2025 market outlook: Liquidity watch

Holiday closures and holiday-shortened trading hours matter when the vix above 20. Thin order books can exaggerate moves, traders warn. That backdrop can amplify both up and down moves.

Therefore, bids can vanish faster on negative surprises. Conversely, upside squeezes can travel farther in quiet tape.

In short, a cautious stance into Friday’s early close isn’t a forecast. It’s a liquidity reality this Thanksgiving week 2025 market outlook considers.

What’s Next: Catalysts after the holiday

Watch Tuesday’s retail sales, PPI, and Wednesday’s claims, durable goods, and the Beige Book. Early spending readouts from card trackers will follow the weekend.

Then focus shifts back to the fed december rate decision setup and any catch‑up reports from delayed agencies. Fresh commentary from Fed officials could also move rates and risk. Traders will price the path in real time.

If consumer resilience holds, equity sentiment might stabilize. But if growth signals fade, volatility may persist into December.

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