Stocks Rally as Rate-Cut Optimism Reignites Mega-Cap Momentum

The stock market delivered a strong rebound to begin the holiday-shortened week, powered by renewed confidence that the Federal Reserve may still cut rates in December. The upbeat shift in sentiment ignited buying across major indices, with mega-cap and tech names driving the advance.

The Nasdaq Composite outperformed with a 2.7% surge, while the S&P 500 added 1.6% and the Dow Jones Industrial Average gained 0.4%. Broader participation extended to smaller caps as well, with the Russell 2000 rising 1.9% and the S&P Mid Cap 400 climbing 1.0%.

Optimism accelerated after Fed Governor Christopher Waller—one of the most influential FOMC voting members—said he supports a December rate cut and emphasized a data-dependent approach to further easing. San Francisco Fed President Mary Daly also signaled openness to a December reduction. Markets reacted quickly: the CME FedWatch tool now assigns an 85.1% probability to a 25-basis-point cut next month, up sharply from 71% on Friday.

Mega-caps drove the day’s leadership, lifting nine of the eleven S&P 500 sectors. Communication services (+3.9%) and information technology (+2.5%) led the leaderboard, while the Vanguard Mega Cap Growth ETF rallied 2.5% as all “Magnificent Seven” stocks finished higher.

Tesla stood out with a 6.75% jump, while Alphabet rallied 6.28% as its new Gemini 3 AI model drew positive market buzz. Semiconductor stocks also rebounded sharply: Broadcom (+11.1%) and Micron (+8.0%) fueled a strong move in the PHLX Semiconductor Index, which gained 4.6%, though the group remains down for November.

Only consumer staples (-1.3%) and energy (-0.3%) finished lower. Staples lagged as capital flowed back into higher-beta areas, though Tyson Foods managed a standout gain after confirming it will close its Lexington, Nebraska beef facility—validating prior reporting on the restructuring.

The S&P 500 and Nasdaq briefly crossed above their 50-day moving averages intraday before closing just below them, a reminder that while confidence in mega-cap and AI-linked names is returning, investor appetite for full risk-on positioning remains tentative.

Still, today’s action reflects a meaningful shift in tone: buyers are re-engaging, particularly in the market’s largest and most influential names, setting a firmer backdrop heading into the second half of the week.

Our FTinvest 11 model portfolio extended its winning streak today, adding 0.16% and closing at a new all-time high of 881.01, marking another steady step forward. Unlike the broader market—which saw heavier swings tied to shifting rate-cut expectations—FTInvest 11 delivered a focused, orderly advance driven by continued strength in several core holdings.

The index spent the session in modest positive territory, holding its ground even as parts of the tech and growth complex showed late-day hesitation following yesterday’s sharp rebound. What stood out today was the portfolio’s consistency: gains were narrower than in recent sessions, but the ability to push into fresh record territory highlights resilient momentum and supportive sentiment around the strategy’s key components.

With today’s new closing high, FTinvest 11 continues to demonstrate relative strength despite a still-uneven market backdrop. The model portfolio remains firmly positioned at the top of its performance range, with price action suggesting stable demand and improving confidence as the index moves further into uncharted territory.