Yahoo Finance·2025-11-25 15:30Market Overview - A year-end rally in US stocks was anticipated due to strong demand for AI-linked shares, solid earnings, and historical seasonal strength, but uncertainty has emerged recently [1][8] - The S&P 500 Index has historically gained an average of 1.5% in December since 1945, but is currently on track for a monthly loss, raising questions about seasonality [2][5] Investor Sentiment - Recent market performance has been negatively impacted by losses in technology shares, particularly due to concerns over the AI chip competition between Nvidia and Alphabet [3][6] - Investor anxiety is reflected in the high demand for hedges against losses in Big-Tech stocks, which is at its highest level since August 2024 [3] Economic Indicators - The S&P 500 fell 0.2% recently, failing to maintain a recovery, and is down approximately 2% for the month, marking its first monthly decline since April [5] - Ed Yardeni predicts the S&P 500 is unlikely to reach 7,000 by year-end, citing profit-taking in AI-related stocks as a contributing factor [6] Market Strategy - Analysts suggest a cautious approach to stocks due to uncertainty surrounding AI payoffs and potential rate risks, which may limit market rallies [7][8] - The backdrop of slowing economic growth and heavy AI spending by major tech companies adds to the market's uncertainty [8]