The oldest of the three main U.S. equity indexes opened higher and held its ground all the way through a widely expected rate-cut announcement, Fed Chair Jerome Powell's press conference and the closing bell on Wednesday. The S&P 500 and the Nasdaq Composite were up and down throughout Fed Day but also surged on what many market participants may see as a "Goldilocks" scenario unfolding for the economy.

After a third-quarter-point reduction since September, the target range for the federal funds rate is now 3.50% to 3.75%. According to Louis Navellier of Navellier & Associates, the latest move by the Federal Open Market Committee (FOMC) "will determine how the year will close out."

Navellier notes "that when Powell is replaced next May with a Trump nominee, further cuts will be forthcoming." He adds that "100% of the time stocks were higher 12 months later" when the FOMC cuts the fed funds rate – good news for a stock market that's less than 2% from new all-time highs. "On top of solid growth forecasts for the U.S. GDP and earnings," Navellier concludes, "a cut today is plainly bullish for stocks."

The Fed's updated Summary of Economic Projections (pdf) – including its dot plot – reflects both concerns about the jobs market and persistent inflation as well as rosier growth expectations. The median forecast shows 2.3% GDP growth in 2026, up from 1.8% in September, core inflation of 2.5%, down from 2.6%, and unemployment steady at 4.4%. Altogether, it adds up to only one rate cut in 2026.

Fed funds futures pricing shows a 75.6% probability the Fed holds its benchmark at 3.50% to 3.75% when it meets in January. We'll continue to track reaction to the December Fed meeting in our live Fed blog.

By the closing bell, the blue-chip Dow Jones Industrial Average was higher by 1.1% at 48,057, the broader S&P 500 was up 0.7% at 6,886, and the tech-heavy Nasdaq Composite added 0.3% to 23,654.

GEV doubles its dividend

GE Vernova (GEV, 15.6%) doesn't make the list of our favorite dividend-paying stocks yet, but doubling its quarterly payout rate is a good way to get there. GEV, which was spun off from General Electric in April 2024, has generated a total return of more than 377%, including 90%-plus so far in 2025.

GEV declared a dividend of 50 cents per share for the first quarter of 2026, up from 25 cents and payable on February 2 to shareholders of record on January 5. GE Vernova's board of directors also approved an increase in the company's stock buyback authorization to $10 billion from $6 billion.

Susquehanna analysts Charles Minervino and Eric Clay reiterated their Positive (or Buy) rating and raised their 12-month target price for GEV from $750 to $775 after management also reset its long-term revenue and margin forecasts in a December 9 investor update.

GE Vernova said it would see $52 billion in revenue by 2028; its previous forecast was for $45 billion by then. Management also said EBITDA (earnings before interest, taxes, depreciation and amortization) margin would be 20%, better than its prior forecast of 14%, "as higher pricing flows through the backlog, capacity is scaled, and it continues to execute on its lean strategy."

Minervino and Clay "remain bullish on GEV given its position as the leading gas turbine supplier globally in an environment where load growth expectations continue to accelerate."

Indeed, power demand driven by the AI boom means GE Vernova can "extend its backlog out to 2030" and beyond. "The company's new long-term financial targets give us growing confidence in the trajectory of the business," the analysts conclude.

It's go time for most stocks and sectors

Nike (NKE, +3.9%), Caterpillar (CAT, +3.6%), Johnson & Johnson (JNJ, +3.3%) and American Express (AXP, +3.2%) were among 23 of 30 Dow Jones stocks to close higher on Wednesday, and JPMorgan Chase (JPM, +3.2%) rebounded from a steep sell-off on Tuesday.

Nvidia (NVDA, -0.6%) rallied off its intraday lows, but along with Microsoft (MSFT, -2.8%) the leader of the AI revolution was at the bottom of the index. Nine of 11 stock market sectors were up for the day, including tech stocks, while consumer staples were flat and utilities were down as a risk-on mood took hold in the afternoon.

"With the economy performing better than expected amid a complex macroeconomic environment and corporate earnings rising to double-digit growth," LPL Financial Chief Technical Strategist Adam Turnquist writes, "strategists have increased their stock market forecasts for 2026."

The average year-end 2026 price target for the S&P 500 is up from around 6,500 in early September to 7,269 as of December 9. "A bottom-up analysis," he elaborates, "which aggregates analyst price targets for individual S&P 500 components, suggests the index could reach 7,900 by the end of next year."

Turnquist says communication services stocks, real estate and materials stocks have the greatest potential upside, while consumer staples stocks, health care and industrial stocks have the weakest – and industrials are pegged for 12.8% upside.

Based on data collected by FactSet, 2026 earnings per share (EPS) for the S&P 500 is forecast to be $309, year-over-year growth of 13.6% vs full-year estimates for 2025. LPL Research sees the index at 7,300 to 7,400 by the end of next year.

"Key catalysts include the historical precedent of bull market cycles continuing absent a recession, earnings power fueled by accelerating AI spending trends, easing monetary policy, and a stimulus boost from the One Big Beautiful Bill Act," Turnquist concludes.

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Stocks were choppy Tuesday, with market participants in wait-and-see mode ahead of tomorrow's policy announcement from the Federal Reserve. With the central bank widely expected to cut interest rates again, rate-sensitive small caps outperformed and the Russell 2000 hit a new intraday high.

The small-cap benchmark fell short of a new record close, though, gaining 0.2% to 2,526. The tech-heavy Nasdaq Composite (+0.1% at 23,576) also finished in positive territory, while the broader S&P 500 (-0.09% at 6,840) and the blue-chip Dow Jones Industrial Average (-0.4% at 47,560) ended in the red.

The Fed will wrap up its final meeting of 2025 tomorrow afternoon. According to CME FedWatch, futures traders are currently pricing in an 87% chance the central bank will lower the federal funds rate by a quarter-percentage point to a range of 3.5% to 3.75% – the lowest it's been since September 2022.

But just "beneath this near certainty lies an unusual public split within the Federal Open Market Committee," says Larry Adam, chief investment officer at Raymond James. "Recent dissents highlight the challenge of balancing a cooling job market against stubborn inflation – casting fresh uncertainty over the policy path for 2026."

And the end of Jerome Powell's term as Fed chair in May adds intrigue to the rate-cut debate. National Economic Council director Kevin Hassett, who is the frontrunner to replace Powell, said during a Wall Street Journal CEO Council event on Tuesday that "there's plenty of room" to cut rates moving forward, "if the data suggests we could do it."

For now, Wall Street will have to rely on the FOMC's Summary of Economic Projections, or "dot plot", to see where committee members expect the federal funds rate to be at the end of 2026.

In September, the dot plot revealed median expectations for just one quarter-point rate cut in 2026, following three in 2025. "We don't anticipate major changes to that median view, but the growing gap between market pricing and the Fed's expected rate path is a risk worth watching," says Adam.

Job openings were little changed in October

The Federal Reserve received its last labor market update ahead of tomorrow's policy decision with this morning's release of the Job Openings and Labor Turnover Survey (JOLTS).

According to the Bureau of Labor Statistics, there were 7.67 million job openings in October, a tick higher than the 7.658 million job openings in September.

Total separations, which include quits, layoffs and discharges, slipped to 5.05 million from 5.264 million, as did hires (to 5.149 million from 5.367 million).

"The labor market is holding on, though it remains fairly unfriendly to job seekers," says Elizabeth Renter, senior economist at NerdWallet. "When employers aren't hiring, it makes it difficult for those without work, but also those who could otherwise move on from their current jobs to better opportunities."

The stagnation in both hiring and quits isn't great for the economy, she says, "but it's not bad enough to cause alarm. A more dramatic pullback in hiring could push the unemployment rate up, as could significant layoffs, but we're not seeing either of those in the data, yet."

Nvidia slips after Trump OKs chip sales to China

In single-stock news, Nvidia (NVDA) erased a pre-market lead to end the day down 0.3% even after President Donald Trump on Monday said the tech giant can sell its H200 artificial intelligence chips to China.

The chips would be available to "approved customers," wrote Trump in a Truth Social post, and the U.S. will receive 25% of the sales. "President Xi responded positively" to the news, Trump added.

But the H200 chips are two generations behind Nvidia's B300 chips, says William Blair analyst Sebastien Naji, and "it remains unclear whether there will be actual orders for these older GPUs."

Naji points out that the reversal of the H20 chips in August did not create any new sales. Additionally, China has increased its focus on domestically produced chips from companies such as Huawei and Cambricon.

Still, the analyst does expect sales of the H200 chips, which are more powerful than H20s, to materialize and drive upside to fiscal 2027 revenue estimates.

JPMorgan slides on $105 billion expense forecast

NVDA was one of 19 Dow Jones stocks that closed in the red on Tuesday, but the worst of the bunch was JPMorgan Chase (JPM), which slid 4.7% after increasing its 2026 expense forecast.

The country's biggest bank by assets under management said it expects to spend $105 billion next year, up from an estimated $95.9 billion in spending this year and analysts' forecast for $101 billion.

Marianne Lake, CEO of JPM's Consumer & Community Banking segment, said the spending will cover compensation and product marketing costs, as well as strategic investments such as AI.

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Stocks trended lower throughout Monday's session as caution set in ahead of the December Fed meeting. The central bank is widely expected to announce its third straight quarter-point rate cut Wednesday afternoon. However, uncertainty remains about what's in store for interest rates and the economy in 2026.

"This week's FOMC decision could set the tone for the remainder of 2025 and beyond, shaping expectations for monetary policy, risk appetite, and market leadership," says Mark Hackett, chief market strategist at Nationwide.

Another rate cut "would reinforce the narrative of easing financial conditions," while "any deviation from the expected path, or hawkish commentary, could recalibrate positioning and volatility as investors reassess the Fed's resolve," Hackett adds.

According to CME Group FedWatch, futures traders are pricing in an 87% chance that the Federal Reserve lowers its benchmark rate by a quarter-percentage point – up from 67% one month ago. Odds are currently for two additional 0.25% cuts in 2026.

Wall Street will also see what the Fed expects for next year, too, with the December meeting featuring the release of the Summary of Economic Projections (SEP), or "dot plot," which summarizes each member's expectations for monetary policy going forward.

In September, the dot plot revealed median expectations for just one quarter-point rate cut in 2026, following three in 2025.

At today's close, the blue-chip Dow Jones Industrial Average fell 0.5% to 47,739, the broader S&P 500 slipped 0.4% to 6,846, and the tech-heavy Nasdaq Composite shed 0.1% to 23,545.

Confluent soars 29% on IBM buyout buzz

Confluent (CFLT) was one of the biggest advancers on Monday, jumping 29.1% after International Business Machines (IBM, +0.4%) said it will buy the data streaming platform in a deal valued at $11 billion.

"With the acquisition of Confluent, IBM will provide the smart data platform for enterprise IT, purpose-built for AI," said IBM CEO Arvind Krishna in the press release.

"A sale to IBM makes sense to us and reflects a combination of platform value (data streaming technology enabling real-time workflows, analytics) and current valuation," says Oppenheimer analyst Ittai Kidron. And Big Blue's broad data portfolio and open-source assets "make a good fit for Confluent."

The acquisition is expected to close by mid-2026.

Paramount makes hostile bid for Warner Bros. Discovery

In other M&A news, Paramount Skydance (PSKY, +9.0%) is launching a hostile bid for Warner Bros. Discover (WBD, +4.4%) after the entertainment and media company announced last week that it will sell its streaming and studio assets to Netflix (NFLX, -3.4%).

Paramount said it will bypass WBD's board of directors and take its $30 per-share bid straight to shareholders, representing a 15% premium to WBD's December 5 close.

But Bernstein analyst Laurent Yoon isn't so sure that'll fly. "If PSKY goes directly to shareholders with the same proposal WBD's board already rejected, we remain skeptical that shareholders would view that offer as superior to NFLX's – at minimum, it's far from a slam dunk, assuming the Board went through a rigorous evaluation process," he wrote in an early morning note.

Yoon has an Underperform (Sell) rating in PSKY, an Outperform (Buy) rating on NFLX and a Market Perform (Hold) rating on WBD.

Carvana to join the S&P 500

Elsewhere, Carvana (CVNA) jumped 12.1% after S&P Dow Jones Indices said it will add the online used car retailer to the S&P 500, effective ahead of the December 22 open.

Ireland-based building materials firm CRH (CRH, +5.9%) and HVAC specialist Comfort Systems USA (FIX, -1.2%) will also join the broad-market index.

The three stocks will replace LKQ (LKQ, -2.0%), Solstice Advanced Materials (SOLS, -0.9%) and Mohawk Industries (MHK, -1.8%).

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Stocks notched modest gains Friday after the latest inflation data did little to sway market expectations for a rate cut at next week's Fed meeting. The main indexes managed to carve out weekly gains, too, kicking off a historically strong month on a positive note.

At the close, the blue-chip Dow Jones Industrial Average gained 0.2% at 47,954, the broader S&P 500 rose 0.2% to 6,870, and the tech-heavy Nasdaq Composite added 0.3% to 23,578.

Ahead of the open, the Bureau of Economic Analysis said that the Personal Consumption Expenditures (PCE) Price Index – the Fed's preferred measure of inflation – rose 0.3% from August to September and was 2.8% higher than the same month one year ago.

Core PCE, which excludes volatile food and energy prices, was up 0.2% month over month and 2.8% year over year.

Both the headline and core inflation figures matched economists' forecasts, while the 0.4% rise in personal income came in slightly above expectations. However, the 0.3% increase in personal spending was a bit lower than anticipated.

The data, which was delayed due to the record-long government shutdown, is a bit stale, but confirms "the U.S. consumer and inflation were losing momentum at the end of the third quarter, before the government shutdown became an added headwind contributing to a year-end economic soft patch," says Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute.

But Timmerman notes that "more timely data" on consumer sentiment from the University of Michigan "should bode well for the all-important holiday shopping season."

Specifically, the University of Michigan this morning said consumer sentiment rose 2.3 index points in early December, with the increase primarily coming from younger consumers.

"Consumers see modest improvements from November on a few dimensions," said Surveys of Consumers Director Joanne Hsu, though she cautioned that "the overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices."

Today's economic reports had little impact on rate-cut expectations. According to CME Group FedWatch, futures traders are pricing in an 87% chance the Fed will lower the federal funds rate by a quarter-percentage point next Wednesday afternoon, about the same odds as yesterday.

Netflix wins the Warner Bros. bidding war

In single-stock news, Netflix (NFLX, -2.9%) agreed to buy Warner Bros. Discovery's (WBD, +6.3%) film studio and streaming services in a cash-and-stock deal valued at $72 billion, or $27.75 per WBD share. It also said it will pay a $5.8 billion breakup fee if the deal is not approved.

Netflix won out over Paramount Skydance (PSKY, -9.8%) and Comcast (CMSCA, +0.4%), which were also interested in taking over the assets once Warner Bros. spins off its cable network business next year.

"I know some of you are surprised that we're making this acquisition, and I certainly understand why," said Netflix co-CEO Ted Sarandos on a call with analysts. "Over the years, we have been known to be builders, not buyers."

Sarandos added that while Netflix already has "incredible" content and "a great business model," the acquisition "is a rare opportunity that's going to help us achieve our mission to entertain the world and to bring people together through great stories."

While some media reports suggested an uphill regulatory battle for the deal, Sarandos said he's "really confident" the company will "get all the necessary approvals we need."

WBD is expected to spin off its cable assets in Q3 2026, and estimates are for the Netflix deal to close in the next 12 to 18 months.

Ulta tops S&P 500 after earnings

Elsewhere, Ulta Beauty (ULTA) surged 12.7% – making it the best S&P 500 stock Friday – after the cosmetics retailer's beat-and-raise quarter.

The company also saw notable strength in its e-commerce segment and posted higher-than-expected same-store sales growth of 6.3% for its fiscal third quarter.

"The company quelled fears around a near-term sales slowdown," says UBS Global Research analyst Michael Lasser. "It noted it has seen solid Black Friday and Cyber Monday trends so far. It has continued to gain market share despite driving more efficiencies with promotions. So, we think Ulta left some upside on the table with its Q4 guide."

Lasser reiterated his Buy rating on the consumer discretionary stock and lifted his price target from $680 to a Street-high $690, representing implied upside of 15% to current levels.

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The crypto trends we're watching in 2026 include one major story and three minor themes that support it.

A little more than 17 years after Satoshi Nakamoto famously introduced bitcoin (BTC) to the world, cryptocurrency is still a fast-growing market. It's maturing at a rapid pace too.

The big forces shaping bitcoin and the broader market Satoshi Nakamoto's famous white paper (PDF) created include regulatory clarity and scalability; adoption and use; and integration and convergence. Apart from the potential for big gains, real players in the industry are laying a foundation for less friction in financial transactions.

"Less friction" means "lower costs." That's a real-world benefit we can all get behind. Whether bitcoin is an inflation hedge is a question the market will determine.

But technology has a long-term track record of driving efficiency gains. (The best tech stocks have created a lot of wealth for investors in the process.)

Crypto trends to watch in 2026 include big ideas along those lines — above and beyond "BTC go up."

Crypto trends to watch in 2026

There will be more regulatory clarity and more scale in 2026. For example, the SEC is expected to issue new rules on tokens and decentralized finance protocols in the coming months that observers suggest will free digital assets from the burdens of traditional securities registration.

Ethereum recently introduced its latest upgrade designed to increase "Layer-2" efficiency and make it easier — and faster — to execute transactions. Reducing congestion on the main network will, again, lower costs.

Adoption and use, perhaps as a function of regulatory clarity and increasing scale, are also rising. Consider BlackRock (BLK) CEO Larry Fink, once a loud and "proud" skeptic who is now leading one of the biggest efforts to mainstream crypto.

BlackRock's iShares Bitcoin Trust ETF (IBIT) is now the largest spot bitcoin ETF with more than $70 billion in assets under management.

BlackRock, also an active institutional investor in real estate assets, is among the advocates of real-world asset (RWA) tokenization. Tokenization enables fractional ownership of relatively illiquid assets, round-the-clock trading, increased transparency and easier management through smart contracts.

Meanwhile, the institution's annual People & Money (PDF) survey found that while 23% of individual investors report they own ETFs, 27% said they own crypto.

At the same time, the integration of DeFi protocols and services into the TradFi system continues. It includes another big institution led by a former crypto skeptic, JPMorgan Chase (JPM) and CEO Jamie Dimon. It features the use of stablecoins for payments and cross-border settlements.

Integration and convergence is the biggest, broadest subplot imaginable. It's crypto and artificial intelligence (AI) and robotics, for example, and it's also crypto and stocks and prediction markets.

AI enhances blockchain operations by optimizing liquidity pools in DeFi and improving platform security. It also provides a secure, transparent and decentralized infrastructure for AI development and data integrity.

How to invest in crypto trends

Perhaps nothing demonstrates the growth and maturity trend better than price action for Strategy (MSTR), which used to be a software company called MicroStrategy before former CEO and current Executive Chairman Michael Saylor transformed it into a leveraged BTC bet.

Who needs a corporate behemoth with high and rising operating expenses when you can now get the same kind of exposure — and potential upside — with a low-fee ETF and readily tradable options?

Whether Strategy is "not gonna make it" is a question for the market to decide. But it's not doing anything innovative: "BTC go up" is Saylor's big idea.

Bitcoin and crypto aren't going away anytime soon, though. If you're interested in buying financial assets and selling them at higher prices than you paid for them, you owe it to your net worth to explore as full a range of investable options as possible.

You can do it responsibly, too.

Crypto names to watch in 2026

Crypto is complex. It's murky. It's volatile. The whole market is still smaller than each of Nvidia (NVDA), Apple (AAPL), Alphabet (GOOGL) and Microsoft (MSFT). But it's growing and maturing.

Opportunities to participate are expanding too — new ETFs offer staff to do the due diligence on obscure altcoins for you. The CoinShare Altcoins ETF (DIME) fills this bill.

At a more basic level, IBIT makes MSTR obsolete for aggressive investors and traders looking to multiply their gains with riskier strategies. The best bitcoin ETFs and digital asset ETFs are less concentrated vehicles than, say, MSTR for you to use to expand your participation.

The number of crypto stocks creating value in the industry by building platforms to transact, such as Coinbase Global (COIN) and Robinhood Markets (HOOD), is growing too.

Crypto names to watch include bitcoin. "Bitcoin dominance" is receding, but bitcoin can still get bigger. ETH, Solana (SOL), Chainlink (LINK) and Ondo Finance (OND) are just getting bigger faster than BTC.

Core Scientific (CORZ) and Cipher Mining (CIFR) are deeply tied to digital asset mining, which is becoming increasingly professionalized and will see particular benefits from AI integration.

These are good developments, and you can capture their upside for yourself by owning stocks such as COIN and HOOD as well as Galaxy Digital (GLXY) that facilitate digital-asset trading.

Bigger names such as Dow Jones stocks NVDA and old Big Blue, International Business Machines (IBM), are exposed to the biggest, broadest digital trend. You'll find these names — and COIN — in an S&P 500 ETF.

More curious than that about this fast-growing, still-maturing market? You can capture all the major and minor crypto trends to watch in 2026 with an ETF or two.

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It was a choppy session for stocks Thursday as market participants weighed the latest jobs data against expectations for a rate cut at next week's Federal Reserve meeting. Still, small caps rallied hard on hopes for lower interest rates, while speculation over a Mag 7 stock's massive spending cuts kept the Nasdaq Composite above water.

Ahead of the open, data from Challenger, Gray & Christmas showed that U.S.-based employers announced 71,321 job cuts in November – up 24% year over year. While this marked a 53% drop from the number of layoffs announced in October, it's still the highest for the month since 2022.

Employers have announced 1.17 million layoffs for the year to date through November – the most since 2020. According to Challenger, Gray & Christmas, it's just the sixth time since 1993 that job cuts through November have exceeded 1.1 million.

The Labor Department also released its weekly jobless claims update ahead of the open, with first-time filers declining 27,000 over Thanksgiving week to 191,000 – the lowest level since September 24, 2022. Continued claims rose by 56,776 to 1.8 million.

The data did little to move the needle on market expectations for a December rate cut. According to CME Group FedWatch, futures traders are currently pricing in an 87% chance that the Fed will lower the federal funds rate by a quarter-percentage point next Wednesday.

Higher odds of looser monetary policy helped small-cap stocks outperform Thursday, with the Russell 2000 climbing 0.8% to 2,531 – a new all-time closing high. The tech-heavy Nasdaq Composite (+0.2% at 23,505) and the broader S&P 500 (+0.1% at 6,857) eked out a gain, while the blue-chip Dow Jones Industrial Average (-0.07% at 47,850) closed lower.

Snowflake slumps after earnings

In single-stock news, Snowflake (SNOW) slumped 11.4% after the cloud-based data storage platform reported its fiscal 2026 third-quarter results.

While SNOW beat on the top and bottom lines, its forecast for fourth-quarter product revenue represents slower year-over-year growth than what was seen in Q3.

Wedbush analyst Daniel Ives maintained an Outperform (Buy) rating on the tech stock after earnings, saying he'd be a buyer on any weakness in the shares.

"Overall, we continue to believe that SNOW is well-positioned to be a key 2nd derivative in the AI Revolution as it will continue to benefit from the significant acceleration of use cases and a rapidly growing pipeline," Ives writes in a note to clients.

Salesforce leads Dow Jones stocks after its earnings report

Elsewhere on the earnings calendar, Salesforce (CRM) jumped 3.7% after its fiscal 2026 Q3 results, making it the best Dow Jones stock on Thursday.

While Salesforce reported higher-than-expected earnings of $3.25 per share, its revenue of $10.26 billion came up short of estimates. Still, Wall Street cheered strong guidance for its fourth quarter and full fiscal year.

"CRM delivered a very solid fiscal Q3," says Mizuho analyst Gregg Moskowitz. "Agentforce annual recurring revenue has also now eclipsed $500 million and grew an impressive 330% year over year. Additionally, customers in production with Agentforce grew 70% sequentially, and far more customers are refilling the tank after having used up their commitments."

Moskowitz anticipates a much better year for Salesforce in calendar year 2026, "with legitimate potential for re-acceleration." And following the blue chip stock's year-to-date decline of more than 25%, the analyst finds the current valuation "very compelling."

He has an Outperform rating on CRM and a $340 price target – representing implied upside of 37% to current levels – adding that Salesforce a top stock pick.

Meta soars on metaverse spending speculation

Meta Platforms (META) outperformed its fellow Magnificent 7 stocks today, rising 3.4% after a Bloomberg report suggested the Facebook parent will cut spending to its Metaverse segment by as much as 30%.

The company rebranded itself in 2021 – changing its name from Facebook to Meta Platforms – to reflect a shift toward the metaverse. However, those projects have taken a backseat to Meta's AI initiatives.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, says this reported move marks a strategic pivot rather than shrinking ambition.

"AI is the obvious beneficiary," he adds. "Unlike the Metaverse, AI is already delivering measurable improvements across Meta's core platforms, from ad targeting to user engagement, and it's central to future monetization opportunities."

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This is the time of year when Wall Street strategists look into their proverbial crystal balls to get a sense of what investors may face in the new year. This year, Kiplinger Personal Finance Magazine spoke with Keith Lerner, the chief market strategist and chief investment officer for Truist Wealth.

Lerner says the U.S. stock market will contend with "a carousel of concerns" but should come out ahead in 2026, thanks to strong fundamentals. Read on to see what's behind Truist's bullish view.

Kiplinger: What do you see ahead for financial markets in 2026? Do you have a target price for the S&P 500?

KL: We don't do targets. When we think about markets, we take a weight-of-the-evidence approach and keep an open mind. We look through four main lenses: History, the economic cycle, fun­damentals and market signals.

Okay, let's start with history.

Warren Buffett said if all you needed was history, the richest people would be librarians. But it's a good starting point.

There's an old saying that's still true: Bull markets don't die of old age. We've had 10 bull markets since 1957. Seven of those have lasted more than three years. In year four, you had further gains every time — an average of 16%. But there's a caveat: Year three tends to be choppy, with an average return of 1%.

We really didn't have much of that in 2025, so maybe that takes a little bit away from the next year's gain. Either way, the average cumulative price gain for those seven bull markets is 229%. At this point [through October 31], we're up 91%. That suggests the bull market has further to go.

We also did a study that found when the Federal Reserve cuts in­terest rates with the market near record highs, a year later, stock prices are up more than 90% of the time, with an average gain of 13.1% — with the key caveat that we don't fall into recession. And I should add that as you move into the fourth year of a bull market, it's not unusual to see pullbacks, with drawdowns of 8% to 10% common.

What's your take on the economy?

We're looking for a slight uptick in economic growth in 2026, after landing at about 1.8% in 2025. So a little bit better, but not gangbusters. The economy helps us to say whether we want to be on offense or defense or somewhere in between. We still want to be tilted toward equities, because we think there's further to go. But we're not at maximum equity exposure because it's not the beginning of the cycle.

There are three main factors that we think will support the economic environment: One, the tax changes that we saw in mid-2025 won't get implemented, or we won't see the benefits, until 2026. Consumers will see some tax refunds in the first quarter when they file their taxes, so we'll hopefully get a little bit of a boost in consumer spending from that. There are a lot of incentives for businesses as far as capital expenditures and accelerated depreciation; that will be helpful for companies.

And on the tariff front, we're at a point where companies are adapting, and at least on the margin there will be more clarity than we saw in 2025. The last factor is that the Fed is cutting rates — we think toward 3% on their benchmark rate by the end of 2026, from a target range of 3.75% to 4.0% at the end of October.

What's the risk to your economic outlook?

There's a divergence between labor-market and other economic data. Some of the reports on gross domestic product look stronger, but the labor market, any way you look at it, is softening. If we show a negative job-growth trend, it suggests that consumer spending, which is two-thirds of the economy, is going to slow down. That's a risk, but not our base case.

Let's discuss fundamentals.

The north star for the bull market is still corporate profits. As the stock market has reached new highs, so have the estimates for earnings. This year we've seen earnings growth expectations broaden out from tech and growth stocks to the average stock and to small caps. In the past couple of months, we've seen earnings trends move up across the board.

Here's the tension in the fundamental story: Valuations by almost any historical metric are high. A price-earnings ratio is a reflection of confidence — the market is expecting good things to happen. If they don't, it could become vulnerable. We need to see an economy that continues to chug along, and we need to see this dominant theme of artificial intelligence, tech and rising earnings trends continue to support the market.

Are you worried about an AI bubble? If uptake of the technology slows, or it isn't monetized as expected, will the boom turn into a bust?

Every bull market has a dominant theme; this one's is AI. Think of it as the ChatGPT bull market. ChatGPT came out in November 2022; the bull market started in October.

People ask me all the time if we're in a bubble. There are definitely pockets of froth, but overall, we're not seeing it. The tech sector is up just over 30% year over year through October. Back in the 1990s tech bubble, we saw 12-month gains of over 100% — that's a red alert you're in bubble territory. The sector is trading at around a 30 P/E; back then, it was closer to 50. That doesn't mean there's no risk. But the tech sector has the strongest earnings trend — estimates keep getting moved higher. That's what we're watching.

What are the market signals you're watching?

One reason the bull market deserves the benefit of the doubt is that the primary uptrend remains intact. Stocks overall are trading above their long-term moving averages [a series of average closing prices over a certain period — say, the past 200 days]. And that's not just in the U.S. but around the globe.

As the bull market matures, we're also watching investor sentiment, although it's an indicator that works better at market bottoms, when there's a lot of fear, than at market tops. When people become complacent and you see huge inflows into the market or sentiment surveys that show more bulls than bears, that's risky.

I would say sentiment is a bit elevated, but we're not seeing extreme euphoria. The carousel of concerns continues to spin, and as one recedes another comes up. These concerns keep euphoria in check.

Given your outlook, what's your portfolio advice?

Although investor goals and risk tolerances vary, we generally maintain a slight tilt toward equities. Compared with a portfolio of 50% stocks and 50% bonds, we recommend around 52% in equities, 44% in fixed income, 2.5% in gold and the rest in cash.

In the equity bucket, we've got 76% in the U.S. and 24% in international. We're still Team USA — that's where the earnings are, and the innovation as well. We have an overweight position in large-cap stocks with a growth tilt, but the outlook for small caps is improving, with lower rates and improving profits.

We're neutral on international markets, but in a world where there are a lot of crosscurrents, you want to be diversified. International markets are still relatively cheap; there is more stimulus in Europe and a new leader in Japan that the market is looking at as pro-business. The dollar looks like it has bottomed, but if it weakens further, for whatever reason, that's a reason to own international stocks. We've also added to emerging markets but are still underweight relative to market benchmarks.

On the fixed-income side, we think yields will trend lower in 2026. We like intermediate-term, high-quality, plain-vanilla Treasuries. We're underweight on high-yield corporate bonds — we're taking our risks on the equity side.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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The main U.S. stock indexes closed higher Wednesday after investors, traders and speculators sorted another set of employment data. Market participants seem encouraged by the prospect of at least one more rate cut by the Federal Reserve as another record-setting earnings season winds down.

The ADP National Employment Report has all but sealed a rate cut at the next Fed meeting. Private-sector payrolls were down 32,000 in November vs a FactSet-compiled consensus forecast for 40,000 new jobs. The probability the central bank trims the target range for the federal funds rate by 25 basis points next week is 89.0%, up from 88.0% on Tuesday, according to CME FedWatch.

"Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment," ADP Chief Economist Nela Richardson said, noting a broad-based slowdown led by a pullback among small businesses. November's decline follows an upwardly revised gain of 47,000 in October.

But it's the third decline in four months for private-sector payrolls, and, along with combined losses of 32,000 in August and September, establishes a downward trend, according to BMO Capital Markets Senior Economist Sal Guatieri.

Weakness was widespread across industries, while small businesses shed staff for a fourth straight month. "This might reflect smaller firms struggling more to adapt to tariff-related supply disruptions," Guatieri said.

"The Fed won't have the BLS's official November jobs report before next week's policy decision," Guatieri concludes, "but the ADP report might be all that it needs for the more dovish-leaning governors to counter some hawkish-leaning regional presidents to push through another rate cut."

Meanwhile, UnitedHealth Group (UNH, +4.7%) was the top-performing Dow Jones stock after Roundhill Investments launched the Roundhill UNH WeeklyPay ETF (UNHW, +4.9%), a single-stock exchange-traded fund that generates weekly income.

At the closing bell, the blue-chip Dow Jones Industrial Average had added 0.9% at 47,882, the broad-based S&P 500 was up 0.3% to 6,849 after opening in the red, and the tech-heavy Nasdaq Composite had also rallied from a negative start to post a 0.2% gain at 23,454.

Fly like American Eagle Outfitters

American Eagle Outfitters (AEO, +15.1%) soared on a beat-and-raise fiscal third-quarter report, outshining multiple hot AI-related names on the earnings calendar in the process. People may say they're frustrated right now, but they keep spending money … at least at American Eagle Outfitters.

The consumer discretionary stock rose as much as 17.2% after the retailer posted earnings of 53 cents per share (+29.3% year over year) on sales of $1.36 billion (+5.7% YoY). Wall Street expected EPS of 43 cents on sales of $1.32 billion.

"Strong momentum has continued into the fourth quarter," CEO Jay Schottenstein said in a statement, "including an excellent start to the holiday season." The CEO cited a "record-breaking Thanksgiving weekend, led by an acceleration in demand across brands and channels and underscored by outstanding growth" for American Eagle's two key channels.

The retailer raised its guidance for fourth-quarter operating income from a range of $125 million to $130 million to $155 to $160 million based on estimated comparable sales and total revenue in the range of 8% to 9%.

About that AI hyperscaler spending

AEO outshone tech stocks such as Asana (ASAN, +7.8%), Box (BOX, +6.7%), Marvell Technology (MRVL, +7.9%) and Okta (OKTA, +5.5%), which also posted impressive gains after reporting results and sharing guidance.

CrowdStrike (CRWD, +1.6%) was down as much as 5.9% and bounced around the breakeven line before closing higher. But Gitlab (GTLB, -12.8%) and Pure Storage (PSTG, -27.3%) simply got crushed.

GTLB suffered because its expectations-beating revenue figure was "more modest than expected," according to Mizuho analyst Gregg Moskowitz, who reiterated his Neutral (or Hold) rating on GTLB but cut his 12-month target price from $52 to $47.

PSTG was down big even though it beat revenue estimates, met earnings forecasts and raised its guidance for full-year operating income from $615 million to $634 million. What management didn't do is provide a meaningful estimate for fiscal 2027 sales to AI hyperscalers, including its customer Meta Platforms (META, -1.2%).

"Given this lack of visibility," Susquehanna analyst Mehdi Hosseini cut his rating on PSTG to Neutral (or Hold) from Positive (or Buy). Hosseini maintained his $100 12-month target price as he "waits for greater insight into the company's hyperscaler business."

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The market for initial public offerings (IPOs) was gaining momentum heading into the fourth quarter of 2025, but quickly lost steam as the record-long government shutdown put a short-term halt to public offerings.

According to Renaissance Capital, the 64 IPOs we saw in Q3 raised a combined $15.3 billion, marking the biggest quarter of new issuance since 2021.

"Twenty-four IPOs raised $100 million or more, another post-2021 high, led by a wave of high-profile unicorns," wrote Renaissance Capital in its Q3 2025 Quarterly Review (pdf). "Renewed interest in growth stocks allowed many of these names to price above the midpoint, and while a few of the earlier IPOs had explosive debuts, like billion-dollar deal Figma's historic 250% pop, more rational appetite prevailed towards quarter end."

But October saw just 22 new listings, and November had half that, with the 33 total offerings raising a combined $5.5 billion.

And while Renaissance Capital does not expect a rush of offerings through year's end "due to a backlogged SEC, pressure on AI and other tech stocks, and the approaching holiday slowdown," there are several names in the pipeline that could make their market debut before the new year.

Among them is medical supplies company Medline, whose estimated deal size of $5.37 billion will make it the biggest IPO since Rivian Automotive (RIVN) raised $11.9 billion in its 2021 offering.

When is the Medline IPO?

In late October, Medline announced that it had filed its IPO paperwork with the Securities and Exchange Commission (SEC). The company updated its filing on December 8, saying it will sell 179 million shares and expects them to be priced between $26 to $30 apiece.

While the exact date of the Medline IPO is unknown, the company is likely to start trading on or around Wednesday, December 17. Its stock will be listed on the Nasdaq Global Select Market under the ticker symbol "MDLN."

Who owns Medline?

Medline previously traded on the public markets in the mid-1970s, but was taken private by Jim and Jon Mills, who founded the company in 1966.

In 2021, a group of private equity firms – Blackstone, Carlyle and Hellman & Friedman – acquired a majority stake in Medline for roughly $30 billion, in what was then the largest leveraged buyout since 2008.

According to the company's regulatory filing, Medline currently operates 22 manufacturing facilities and 69 distribution centers across more than 100 countries. It employs 43,000 folks worldwide.

Its growth is impressive too. The company has enjoyed more than 50 straight years of annual net sales growth. In 2024, Medline generated net sales of $25.5 billion, up 10% from the year prior. And in the first six months of 2025, net sales rose 9.8% to $13.5 billion.

Can I buy MDLN stock?

"An initial public offering enables a private company to 'go public,' or start trading in public markets, by issuing its own shares on a stock exchange for the first time. In this way, any investor can buy shares and the company can raise capital to grow," Kiplinger contributing writer Tom Taulli writes in his article, "What Is an Initial Public Offering (IPO)?".

But buyer beware: IPOs can be volatile — especially for retail investors. While new stocks tend to have strong first-day showings, returns for the first year are generally weak, says the team of analysts at Trivariate Research, a market research firm based in New York.

"In this froth and frenzy, opportunities mix with peril," writes David Milstead, senior associate editor at the Kiplinger Personal Finance magazine. "The safest course may be to wait for companies to settle in some months after their debut, after one or two quarterly earnings reports."

Ultimately, the decision to buy the Medline IPO comes down to your own risk tolerance and personal investing goals. If you do choose to buy shares of MDLN stock when they first begin trading, it's prudent to do so in a small amount that you can afford to lose and have a trading plan in place.

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Investors, traders and speculators welcomed beat-and-raise earnings announcements from two up-and-coming technology companies and a positive forecast from an aircraft maker as the main U.S. equity indexes got back into the green on Tuesday. Momentum ebbed briefly, but fundamentals grounded in the AI revolution and the power of flight carried the trading day.

Everybody from Washington, D.C., to Wall Street is alert to President Donald Trump's weekend revelation that he knows whom he will name as the next Fed chair. Trump said today he will announce his choice early in 2026, though markets remain more focused on the next Fed meeting.

In the meantime, the delayed release of September Personal Consumption Expenditures Price Index (PCE) data on Friday is the highlight of this week's economic calendar. CME FedWatch shows an 89.2% probability the Federal Open Market Committee will cut interest rates by 25 basis points when it meets next week.

"After an opening stumble yesterday, stocks are catching a bid today," observes Louis Navellier of Navellier & Associates. "It's being led by semiconductors again, as the volatility of the AI theme has picked up, despite the pledges of an enormous build-out of data centers."

Navellier notes a challenge to Nvidia (NVDA, +0.9%) as the leader of the AI revolution from Alphabet (GOOGL, +0.3%), with Amazon.com (AMZN, +0.2%) joining the competition today with the introduction of its own new AI chip.

Meanwhile, Boeing (BA, +10.2%) was No. 1 among the 30 Dow Jones stocks after Chief Financial Officer Jay Malave said the aircraft maker expects deliveries of its 737 and 787 jets to be up next year. Malave also said Boeing will generate positive free cash flow in the "low single digits." Boeing hasn't reported a profit since 2018.

"Expectations are still high for a strong finish to the year," Navellier concludes, "but we may have to get the Fed cut for the positive momentum to arrive."

At the closing bell, the tech-heavy Nasdaq Composite had added 0.6% to 23,413, the blue-chip Dow Jones Industrial Average was up 0.4% at 47,474, and the broad-based S&P 500 had risen 0.3% to 6,829.

MDB and CRDO see an AI boom-and-bounce effect

MongoDB (MDB, +22.2%) was up as much as 27.6% to a new 52-week high after management of the large-cap stock reported earnings of $1.32 per share (+13.8% year over year) on revenue of $628.3 million (+18.7% YoY), beating a consensus forecast for EPS of 81 cents on revenue of $593.8 million.

CEO CJ Desai cited continued strength in MongoDB's Atlas product, which saw annual sales growth of 30%, and "meaningful" margin outperformance. "Reflecting this strength," Desai said, "we are raising our guidance on the top and bottom line for the rest of the year." The document database provider upped its full-year EPS guidance from a range of $3.63 to $3.73 to $4.76 to $4.80.

MDB stock is up more than 40% year to date but remains more than 45% below its November 16, 2021, all-time high of $585.03.

"Companies across industries and geographies are choosing MongoDB because we provide a unified data platform that powers mission-critical workloads today and also positions them to capitalize on the emerging AI platform shift," the CEO said.

Credo Technology (CRDO, +10.1%) also reflected the impact of the AI boom (and provided, for now, relief from worries about an AI bubble), rising as much as 24.9% on strong results and upbeat guidance.

Management reported EPS of 67 cents (+28.8% YoY) on revenue of $268.0 million (+272.1% YoY), ahead of Wall Street estimates of 49 cents on $235.0 million. Gross margin was 67.7%.

"These are the strongest quarterly results in Credo's history," CEO Bill Brennan said, noting Credo's 20% sequential and 272% annual revenue growth, "and they reflect the continued build-out of the world's largest AI training and inference clusters." Management expects to see fiscal third-quarter revenue of $335.0 million to $345.0 million and gross margin between 64.0% and 66.0%.

Brennan says continued growth for Credo's core franchises, as well as ramp-ups for recently introduced products and services, establishes "an outlook with strong revenue growth and profitability through fiscal 2026 and beyond."

Earnings are fundamental

It is a relatively light day for reporting, but the earnings calendar remains a source of support for a bull market.

"Operating earnings at S&P 500 companies should hit an all-time high of $618 billion for the third quarter of 2025," writes Jason Zweig, author of The Intelligent Investor column for The Wall Street Journal, citing estimates from S&P Dow Jones Indices.

"That's up a remarkable 14% over the second quarter, itself a record," Zweig notes. Profit margins of 13.6% are also at record levels.

Tech stocks Asana (ASAN, +4.9%), Box (BOX, +2.9X%), CrowdStrike (CRWD, +2.5%), Gitlab (GTLB, +5.4%), Marvell Technology (MRVL, +2.0%), Okta (OKTA, +1.5%) and Pure Storage (PSTG, +7.1%) are scheduled to release results after the closing bell. American Eagle Outfitters (AEO, -1.9%), a consumer discretionary stock, will also reveal numbers this evening.

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All three main U.S. equity market indexes closed lower on Monday amid a continuing sell-off for bitcoin and stocks leveraged to digital assets, as well as tepid economic data. History suggests better things are ahead, at least for the S&P 500, with investors, traders and speculators looking forward to another rate cut by the Federal Reserve.

"The S&P 500 clawed its way back from nearly a 5% intra-month drawdown to finish November with a modest 0.1% gain," LPL Financial Chief Technical Strategist Adam Turnquist writes, citing oversold conditions, solid earnings, renewed AI optimism, and repricing of rate-cut expectations at the next Fed meeting as fuel for the rebound.

According to Turnquist, momentum from late November indicates good things for December. "Historically, since 1950, the S&P 500 has averaged a 1.4% gain in December and finished higher 73% of the time." That's the strongest positivity rate of any month. "However," the analyst adds, "December's strength typically emerges in the second half of the month."

The Institute for Supply Management (ISM) said its Manufacturing Purchasing Managers Index (PMI) declined to 48.2% in November from 48.7% in October. According to ISM, a Manufacturing PMI above 42.3% over a period of time generally indicates economic expansion.

"Although December's headline was somewhat softer than expectations," Barclays economist Jonathan Millar writes, "we do not view the miss as especially meaningful."

Millar notes that the ISM print "was more downbeat than the competing S&P Global Manufacturing PMI," which declined to 52.2% in November from 52.5% in October. The "breakeven" level for the S&P PMI is about four points higher than the ISM threshold, the economist says, though "both point to flat manufacturing."

The main event on this week's economic calendar is the delayed release of September Personal Consumption Expenditures Price Index (PCE) data. The Fed prefers core PCE over the Consumer Price Index (CPI) to measure price stability.

It is late, but it's the best inflation data we have heading into the next Fed meeting. CME FedWatch reflects an 87.6% probability the Federal Open Market Committee will cut interest rates by 25 basis points next week.

At the closing bell, the broad-based S&P 500 was down 0.5% at 6,812, the blue-chip Dow Jones Industrial Average had shed 0.9% to 47,289, and the tech-heavy Nasdaq Composite was off 0.4% at 23,275.

Bitcoin and crypto stocks lead the way lower

Coinbase Global (COIN, -4.8%) makes the list of the riskiest S&P 500 stocks right now because of days like Monday. "Bitcoin (BTC) bounced from $82,000 to approximately $92,000 and then lower again today at $86,000," Bernstein analyst Gautam Chhugani observes. "This price action suggests weak market sentiment, which has impacted digital asset equities."

Chhugani notes that COIN is down more than 20% over the last 30 days, and Robinhood Markets (HOOD, -4.1%) is down more than 10%. "However, unlike previous crypto corrections," he adds, "operating businesses look strong and only signs of speculative excess appear in the long tail of Strategy (MSTR, -3.3%) copycats."

The analyst suggests market concerns about MSTR, which is explicitly a bitcoin stock and was down as much as 12.2% on Monday, are overstated: "There is no realistic scenario which threatens the longevity of MSTR." Strategy revealed in a regulatory filing on Monday that it purchased 130 bitcoin from November 17 through November 30.

In addition to updating its BTC holdings, Strategy announced the establishment of a $1.44 billion U.S. dollar reserve fund "to support the payment of dividends on its preferred stock and interest on its outstanding indebtedness."

Management also revised its fiscal year 2025 guidance to reflect a year-end bitcoin price in a range of $85,000 to $110,000 versus a prior estimate of $150,000.

Meanwhile, Chhugani concludes, "Coinbase is executing hard on its 'everything exchange' vision." The analyst expects management to announce the launch of two major products on December 17, including tokenized equity trading and the introduction of prediction markets on its primary platform.

It will compete with Robinhood, which "continues to aggressively diversify from its equity trading business into crypto, tokenized equities and prediction markets" as the crypto exchange business model and the broker-dealer business model converge.

"Coinbase wants its users to trade crypto, equity and prediction markets on the same platform," the analyst concludes.

NVDA > the entire crypto market

Nvidia (NVDA, +1.7%), incidentally, is bigger in market cap terms than the entire universe of cryptocurrencies – bigger than bitcoin plus ethereum, as well as all the other altcoins combined.

The leader of the AI revolution added another $72 billion to its total value after it announced a $2 billion investment in electronic design automation software maker Synopsys (SNPS, +4.9%).

"The complexity and cost of developing next-generation intelligent systems demands engineering solutions with a deeper integration of electronics and physics, accelerated by AI capabilities and compute," Synopsys CEO Sassine Ghazi said in a statement. "No two companies are better positioned to deliver AI-powered, holistic system design solutions than Synopsys and Nvidia."

For the record, Apple (AAPL, +1.5%), Alphabet (GOOGL, -1.7%) and Microsoft (MSFT, -1.1%) are also bigger than crypto, and Amazon.com (AMZN, +0.3%) is not far behind.

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With stock markets hitting highs and a flood of new companies selling their shares to investors, it's easy to get FOMOIPO — fear of missing out on initial public offerings. But the fortunes of many of the debuts in this year's surge are tied to artificial intelligence (AI) or cryptocurrency, making the batch of new issues perhaps even riskier than the typical crop.

Through September 30, there were 161 U.S. IPOs, according to IPO research firm Renaissance Capital, compared with 150 for the entirety of 2024. Renaissance counted 64 IPOs in the third quarter, raising a combined $15.3 billion—the biggest quarter for new issuance since 2021.

One of 2025's top-performing IPOs has been CoreWeave (CRWV), which operates a cloud platform for artificial intelligence computing. Priced at $40 per share at its March IPO, it closed out September at $137, giving it a market capitalization of $71 billion. Circle Internet Group (CRCL), a trading platform for bitcoin and an issuer of a stablecoin (a type of cryptocurrency pegged to the U.S. dollar), was priced at $31 in June and is now $133, giving it a market value of $30 billion.

Both are unprofitable, according to S&P Global Market Intelligence. (Prices, returns and other data are as of September 30, unless otherwise noted.)

"The IPO market tends to be a lot busier in periods when asset prices may be somewhat inflated, toward the top of a market cycle," says Nick Einhorn, the director of research at Renaissance. The "danger," he says, is that when the cycle turns, IPO stocks can fall sharply.

IPOs have always been risky because the companies are typically younger or less established than those already trading on the stock exchange, and IPOs don't have a track record of delivering results to a broad shareholder base.

A go-to exit strategy

IPOs originated hundreds of years ago as a way for companies to raise capital to expand their business — especially needed in an industrial economy that required property, manufacturing plants and equipment.

The market has evolved over time, particularly in the final decades of the 20th century, when the U.S. economy shifted and became dominated by technology companies. Today, raising capital is sometimes secondary to giving early owners a way to exit their investments profitably or providing a way for employees compensated with stock to easily know what their shares are worth.

For many companies, a big part of the IPO story is the buildup to its first day of trading with individual investors — and whether the shares will "pop," producing a big return. Einhorn says the average first-day return for IPOs of $100 million or larger so far in 2025 has been 27%, compared with 16% in 2024.

In this froth and frenzy, opportunities mix with peril. The safest course may be to wait for companies to settle in some months after their debut, after one or two quarterly earnings reports.

Investors should also know when a company's "lock-up period" ends. This is a window, typically 90 to 180 days from the IPO, when company insiders cannot sell their stock. IPO investors can typically expect some selling pressure when it expires.

Jay Ritter, a University of Florida finance professor with a longtime specialty in IPOs, says his work suggests investors look to more mature companies, which he defines as having at least $100 million in revenue when they come public.

According to S&P Global Market Intelligence, 42 of the companies with IPOs this year make the cut, including curriculum provider McGraw Hill (MH) and online ticket reseller StubHub Holdings (STUB). Ritter says he has found "a pretty strong pattern" that the mature companies, on average, do as well as the broader market, while less-mature companies "all too often struggle."

Investors interested in IPO stocks should consider valuation measures — particularly price-to-sales ratios, for unprofitable companies — and generally use all the typical methods they use to pick investments, says Ritter. "Don't think of it as an IPO or recent IPO, think of it as a stock, whether it has been traded for three months or 30 years."

Consider the old guard

Not all of 2025's biggest IPOs fall into edgy, trendy categories, and a couple of newbies that might be worth exploring, analysts say, are a little more old school.

Venture Global (VG) pursued an IPO because it needed capital to continue an ambitious plan, launched in 2022, to produce, refine and sell liquefied natural gas from the U.S. Gulf Coast. The company has chosen so far to sell at market prices rather than use long-term contracts for revenue certainty. With $31 billion in debt, it has little margin for error.

That risk may be priced in, however, because the shares, which went public in January at $24, are now at $14, trading for less than 10 times estimated earnings for the next 12 months. Analyst Manav Gupta, of investment firm UBS, in August boosted his rating on the energy stock from Neutral to Buy, with a 12-month price target for the shares of $18.

Pork producer Smithfield Foods (SFD) was a public company until its Chinese parent, WH Group, took it private in 2013. WH Group decided to bring it back to public markets in January by selling 13% of the company at $20 a share. Analysts expect earnings per share of $2.35 in 2025 and $2.39 in 2026, up from $1.88 in 2024. The stock's price-to-earnings (P/E) ratio is under 10.

Six of the seven analysts who cover the consumer staples stock have a Buy rating, with an average 12-month target price that suggests a 25% gain from its recent close.

If getting in on the ground floor of brand-new companies is something you want to gamble on, limit your investment to no more than you can lose. You can diversify the risk by choosing an exchange-traded fund, but be forewarned that the ride can be bumpy.

Renaissance Capital's Renaissance IPO (IPO) adds new IPO stocks once per quarter, removing any that have traded for more than three years. The average age of the 31 stocks in the fund is 1.3 years, and it has less than 1% overlap with the S&P 500.

In 2025, it's up 14.5%, roughly even with the 14.8% gain for the S&P benchmark index and ahead of the 10.4% return for the Russell 2000, a popular small-stock index. In the past 10 years, the ETF has been in the top 5% of its category (mid-cap growth funds) three times, but in the bottom 10% five times. On the plus side, its expense ratio of 0.60% puts it among the cheapest 20% of funds in the category.

The First Trust US Equity Opportunities ETF (FPX) is a bit less volatile and has a similar expense ratio, at 0.61%. The fund seeks to replicate the IPOX-100 U.S. index of large, liquid IPOs, which IPOX says captures about 85% of the total market capitalization of IPOs in the previous four years. The ETF is up 39.3% so far in 2025.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Few companies have Coca-Cola's (KO) track record when it comes to returning cash to shareholders, but as a defensive dividend machine, KO stock hasn't been able to keep up with the broader market in the past couple of decades.

The Buy-rated Dow Jones stock remains one of Wall Street's favorite names in the consumer staples sector, but truly long-term shareholders would have been better off putting their cash in an S&P 500 index fund.

That might come as something of a surprise, given Coca-Cola's global reach and impeccable blue-chip credentials. No less an investing eminence than Warren Buffett has maintained a massive position in the fizzy drinks maker for nearly four decades.

The Oracle of Omaha drank Coca-Cola — and studied its business — for more than 50 years before adding it to the Berkshire Hathaway equity portfolio in the late 1980s.

To this day, KO is the holding company's fourth-largest position. With a stake of 400 million shares worth about $26 billion, KO accounts for almost 10% of Berkshire's U.S. stock portfolio.

Buffett's affinity for Coca-Cola is due in no small part to all the cash it returns to shareholders. As a member of the S&P 500 Dividend Aristocrats, KO is about as reliable a dividend grower as they come. The company has increased its payout annually for more than six decades.

KO has also been generous in returning cash to shareholders through stock buybacks. In the past five years, Coca-Cola has spent an average of $154 million per quarter to repurchase its own shares.

That's what a mature company in Coca-Cola's position needs to do to keep shareholders happy. With average annual revenue growth of only about 3% in the past two decades, KO isn't exactly a growth stock.

The bottom line on Coca-Cola stock?

It shouldn't come as a surprise that a defensive dividend payer such as KO trails the broader market over the past couple of decades. As a low-beta stock, KO tends to lag the S&P 500 when the market is rising, but also holds up better when everything is selling off.

A long bull market driven by outsize gains in tech and communication services stocks is going to leave defensive names behind.

That's partly why KO stock lags the S&P 500 on an annualized total return basis over every standardized time frame beyond one year. In the past three-, five-, 10- and 15-year periods, KO lags the broader market by anywhere from 5 to 12 percentage points.

As for the past two decades? It's not good. Have a look at the chart below to see what KO's chronic underperformance looks like on a brokerage statement.

If you put $1,000 into Coca-Cola stock 20 years ago, it would be worth about $6,200 today, good for an annualized total return of 9.6%. The same amount invested in the S&P 500 would theoretically be worth about $7,900 today.

Truly long-term shareholders have benefited from the ballast a consumer staples stock such as KO can provide in tougher markets, but as a less risky name, it also provided less reward.

The Street is bullish on KO at current levels. Of the 24 analysts covering the stock surveyed by S&P Global Market Intelligence, 13 rate it at Strong Buy, seven say Buy and four call it a Hold. That works out to a consensus recommendation of Buy, with high conviction.

Speaking for the bulls, Jefferies analyst Kaumil Gajrawala calls KO a "standout" among industry peers.

"The business is strong and getting stronger," says Gajrawala, who rates shares at Buy. "Volumes are healthy. Coke's mix and pricing dynamic is one of the best in our space, and free cash flow is set to accelerate."

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What does the Federal Reserve's rate-reduction initiative mean in the short run for your fixed-income holdings?

You'll recall that one year ago, the Fed cut three times, starting by hacking its benchmark overnight funds rate by 0.50 percentage point in September. The year ended with bond markets and fund returns in retreat. It's wishful thinking that cheaper short-term credit and falling money market yields will spark a general bond-buying binge and propel your 2025 total returns toward 10% by year-end.

My judgment is that long-dated bonds are expensive and risky and that we are set for an encore of 2024, when the fourth quarter was a downer, with 19 of 23 fixed-income categories in the red, according to Morningstar.

So I do not expect further advances over the 5% to 8% returns earned through the third quarter. Instead, and pardon the cliché, it looks like déjà vu all over again, with a lot of losses and a few breakevens.

"If you have 6% in the bag already, which is 2% a quarter, I figure now it is sideways or giving a little back" the rest of the year, says Warren Pierson, co-chief investment officer for Baird Asset Management.

Last year, every time the Fed cut, rates on the 10-year note and longer maturities increased, meaning a loss of principal, adds Nick Losey, who manages high-yield and asset-backed securities for Barrow Hanley. (Rates and bond prices move in opposite directions.)

He expects a repeat. Inflation is edging higher, the dollar is weak, and there is no sign of fading economic momentum to the degree that traditionally provokes big flows into Treasury bonds and forces those yields down.

Hang tight

These are not sell signals, just a reality check. Credit conditions are good, yields are respectable, and enough pension funds, banks and insurance companies will keep buying even as individuals withdraw money from bond mutual and exchange-traded funds.

And there is a cavalry of sorts. Bond honcho Christian Hoffmann at Thornburg Investment Management insists that when 30-year Treasuries reach 5%, a herd of buyers will arrive and stanch the sell-off. That may be true, and if you think 5% through 2055 is a fair deal, that is your business. I disagree, and I advise against long T-bonds virtually anytime — and especially now.

Fixed-income thinkers and managers just cannot shake their unpleasant memories of how last fall's Fed rate cuts hurt, rather than helped, bond values.

Morningstar's fourth-quarter 2024 figures tell this story as well as anyone. The four gainers in that list of 23 were floating-rate bank loans and high-yield bonds, which are more correlated with stocks than with Treasuries; ultra-short bonds, which are tantamount to cash and rarely lose any principal under any conditions; and, in a surprise, non-traditional bond funds, which are go-anywhere, actively traded portfolios. All four categories are still in fine shape and are definite keepers.

Municipal bonds also held up in last year's fourth quarter, with some of the smallest losses on the charts. Tax-exempts are well positioned to end 2025 on a better note, even if taxable bonds struggle. The oversupply of municipals that dragged down principal values in the first half is no more.

Also in the past is the overblown (but damaging) fear that the budget-and-tax bill would end or limit the tax exemption. But municipals got so cheap that the buyers returned, so the various muni indexes are back in the green for the year to date.

One fund I like is Baird Strategic Municipal Bond (BSNSX), showing a year-to-date return through September of 3.5% and a tax-free yield of 3.3%.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Few companies have been as critical to mobile communications as Qualcomm (QCOM). The tech giant's chips and technology power devices made by everyone from Apple (AAPL) to ZTE (ZTCOY). At the same time, Qualcomm rakes in billions of dollars of revenue in royalties from licensing its patents.

Based on its ubiquity and illustrious history of technological innovation, you might think QCOM has been a great buy-and-hold bet.

It has not.

Mostly, QCOM has been dead money. And as for the past two decades, it has been a sinkhole of opportunity cost.

Qualcomm was founded in the 1980s, but it emerged as a tech disruptor when the cellphone market blew up in the latter part of the following decade. The company's CDMA digital cellular technology became a global standard, and nearly every handset manufacturer licensed it.

Qualcomm followed that win by pivoting to designing semiconductors for mobile devices. Snapdragon, which integrated CPUs, GPUs, modems and other components onto a single chip, became the go-to processor for Android smartphones.

Today, Qualcomm is evolving its Snapdragon platforms to power AI, PCs and high-end Android smartphones, among other endeavors. It even hopes to compete with Apple's (AAPL) M-series chips.

However, while analysts tend to be bullish about Qualcomm's prospects, its past performance has been desultory.

A valuation hangover from the go-go dot-com days did investors no favors for years – but legal headwinds and dashed dreams hurt more. The company spent a good chunk of the 2010s fighting antitrust lawsuits in the U.S. and overseas. Qualcomm also had a bruising standoff with a little customer known as Apple.

Adding insult to injury, Qualcomm's attempt to acquire NXP Semiconductors (NXPI) was blocked by regulators. A hostile takeover bid for Qualcomm by Broadcom (AVGO) was similarly halted.

Take a look at Qualcomm's top line and you'll see that revenue would grow as much as 30% one year – and then decline 7% the next. The unstable and uncertain situation naturally took a toll on returns.

The bottom line on Qualcomm stock?

Over its entire life as a publicly traded company, QCOM stock almost doubles the performance of the broader market, with an annualized total return (price change plus dividends) of 19.9% vs. 10.8% for the S&P 500.

Unfortunately, that's about the only time frame in which QCOM looks good. Indeed, the tech stock lags the broader market on pretty much every standardized time frame you pull up. (Over the past 10 years, QCOM does outperform the S&P 500 by about 1.6 percentage points.)

What does this sort of chronic underperformance look like on a brokerage statement? Take a look at the above chart and you'll see that if you put $1,000 into Qualcomm stock 20 years ago, it would today be worth about $5,600 – or an annualized total return of 9%.

The same sum invested in the S&P 500 would theoretically be worth $7,900 today, or 10.9% annualized.

Can QCOM stock finally start delivering for patient investors?

Of the 36 analysts covering the semiconductor stock surveyed by S&P Global Market Intelligence, 11 rate it at Strong Buy, five say Buy, 19 have it at Hold and one calls it a Strong Sell. That works out to a consensus recommendation of Buy, albeit with modest conviction.

Speaking for the bulls, Argus Research analyst Jim Kelleher likes the way Qualcomm is navigating the rolling loss of its Apple business by focusing on a host of other opportunities.

"Snapdragon processors are well suited for the age of on-device Gen AI," the analyst writes. "Qualcomm is experiencing rapid growth in markets such as automotive, networking and IoT and has an unmatched royalty stream. On that basis, QCOM appears undervalued on significant long-term growth prospects."

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Stocks were choppy in Friday's abbreviated session, though the three main indexes extended their daily win streaks to five on Black Friday. Today's gains came even as futures and options trading were temporarily halted ahead of the open due to a cooling issue at a Chicago Mercantile Exchange (CME) data center.

"'Better late than never' may turn out to be the stock market's story for November," says Chris Larkin, managing director of Trading and Investing at E*TRADE from Morgan Stanley. "While it might be too soon to say we've seen the last of tech volatility, over the past [five] trading days, the S&P 500 erased nearly all of its November pullback, rallying from a nearly 10-week low to roughly 1% below its record close."

Today, the S&P 500 rose 0.5% to 6,849, while the Dow Jones Industrial Average added 0.6% to 47,716 and the Nasdaq Composite finished 0.7% higher at 23,365.

For all of November, the S&P 500 closed flat, the Dow gained 0.3% and the Nasdaq shed 1.7%. These are pretty impressive returns considering the three indexes were staring at month-to-date losses ranging between 3.8% and 6.9% one week ago.

Larkin says that the market needs to prove it can sustain its momentum, but that the selling seen earlier this month "looks like it could be more of a short-term AI-selling climax than a sign of heightened bearishness."

History is certainly working in the bulls' favor. According to Yardeni Research, December has been one of the best months for stocks, with the S&P 500 averaging a 1.3% gain since 1928. And the index has finished the month in positive territory 70 times over that same time frame.

Analyst sees 65% upside for red-hot CleanSpark

In single-stock news, CleanSpark (CLSK) surged 12.3%, extending its post-earnings surge. Earlier this week, the bitcoin miner and data center developer reported "transformative" fiscal 2025 results that showed a more than 100% year-over-year rise in revenue.

"We are evolving into a comprehensive compute platform that is prepared to optimize value from both AI and bitcoin workloads," said Matt Schultz, Chairman and CEO of CleanSpark. "Our deep expertise in power procurement, infrastructure development, and efficient scaling gives us a unique advantage in meeting surging global demand for compute."

CLSK ended Friday with a weekly gain of 55% and Needham analyst John Todaro thinks the red-hot crypto stock can climb even higher. The analyst reiterated his Buy rating and raised his price target to $25 from $23 – representing implied upside of 65% to today's close – as CleanSpark "transitions more toward high-performance computing from bitcoin mining."

Intel gains on Apple buzz

Intel (INTC) was another notable gainer in Friday's shortened session, surging 10.3% after TF International Securities analyst Ming-Chi Kuo tweeted that the chipmaker is expected to start shipping Apple (AAPL, +0.5%) low-end M processors as early as 2027.

"There have long been market rumors that Intel could become an advanced-node foundry supplier to Apple, but visibility around this had remained low," the Apple supply chain analyst posted. "My latest industry surveys, however, indicate that visibility on Intel becoming an advanced-node supplier to Apple has recently improved significantly."

The former Dow Jones stock has more than doubled since the start of the year thanks to big investments from the U.S. government and Nvidia (NVDA, -1.8%). But analysts are still sitting on the sidelines.

Of the 45 analysts following INTC who are tracked by S&P Global Market Intelligence, four say it's a Buy or Strong Buy, 24 have it at Hold, and seven rate it a Sell or Strong Sell. This works out to a consensus Hold recommendation.

Wedbush analyst Matt Bryson is one of those with a Neutral (Hold) rating on Intel.

"We see recent investment announcements as the impetus for much of the valuation disconnect, with these ties having seemingly increased optimism around INTC's opportunities," he says. "And, while we do believe these deals bolster INTC's balance sheet, we are less certain around near or longer-term positive business ramifications that might result from this newsflow."

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Who would have believed at the turn of the 21st century that there would be such a thing as a trillion-dollar stock? (Or that the Dow would reach 36,000, for that matter?)

At the end of 2000, the most valuable company was Exxon Mobil (XOM), with a market capitalization — price times shares outstanding — of roughly $302 billion. That's one-fifteenth the value of Nvidia (NVDA) today. Just counting to a trillion incredibly fast, with no bathroom breaks, would take 32,000 years, according to the Q&A platform Quora.com.

In August 2017, however, I wrote, "It may be a matter of months, or more likely a few years, but sometime soon a U.S. company will breach the trillion-dollar mark." I was more right than I expected.

At the time, I offered estimates of when each would hit a trillion in market cap. Apple (AAPL) was first, as I predicted, but it took just 11 months, a year and a half ahead of schedule. The other four quickly followed: Amazon.com (AMZN) in September 2018; Microsoft (MSFT) in 2019; Alphabet (GOOGL), the former Google, in 2020; and Meta Platforms (META), the former Facebook, in 2021.

At that point, I wrote another column, saying, "I'm doubling down and recommending them all." Sure enough, as a group, they have nearly doubled. (Prices, returns and other data are as of September 30; stocks I like are in bold.)

Today, with the additions of Nvidia, Tesla (TSLA), Broadcom (AVGO) and Berkshire Hathaway (BRK.B), membership in the Trillion-Dollar Club (let's call it TDC) has grown to nine. The combined market cap of these stocks accounts for 41% of the capitalization of all the companies of the S&P 500 Index. A mere 10 years ago, the nine largest U.S. stocks had a total market cap of 18% of the S&P 500.

Today, eight of the nine members of the TDC are technology (or tech-related) stocks, and for the ninth, Berkshire, Apple alone represents one-fifth of assets. By contrast, in 2015, the top nine consisted of just five tech stocks, plus companies in banking, pharmaceuticals and energy, along with Berkshire. In 2005, only two tech companies graced a highly diversified top nine.

Concentrated bets

The top-heavy nature of the S&P 500 today should make any investor worried. The market is betting heavily, not simply on tech but on artificial intelligence. But you will notice from the bold-facing that I still like trillion-dollar stocks — at least the initial cohort.

Why? Let's start with Alphabet. Since 2017, revenues have quadrupled and earnings have quintupled, yet the stock's price-to-earnings (P/E) ratio, based on a consensus of analysts' forecasts of profits for the year ahead, has declined from 30 to 25. Analysts at investment research firm Value Line expect earnings will rise an average of 12% annually for the next five years, indicating a perfectly reasonable valuation.

Alphabet owns the global entertainment asset with the greatest potential, YouTube, with nearly 3 billion active users. The company is also sitting on more than $95 billion in cash and has very little debt; it has even started paying a small dividend.

Amazon's P/E has dropped from nearly 200 to 32. It dominates the e-commerce market, accounting for 38% of sales, compared with 6% for number two Walmart (WMT).

Apple's valuation has risen to 33, but it was absurdly low (16) in 2017. The company is a profit machine; it earns about 25 cents on every dollar of sales, and those dollars will exceed 400 billion this year. Microsoft has tripled its earnings since 2017. It has a powerful cloud-computing business and has integrated AI into all its platforms.

Meta gets the least respect. Its forward P/E has fallen from 29 in 2017 to 25, despite net profits rising from $18 billion to close to an estimated $72 billion in 2025. The company, which owns WhatsApp and Instagram, recently won its antitrust case, leaving the ownership of its assets intact.

I am less enamored of the TDC newbies. Nvidia was once a lovely choice. In making it one of my 10 stock picks for 2020, I wrote that it "may be the best artificial intelligence play." Since then, its market cap has risen from $122 billion to $4.5 trillion.

Ponder that number. It’s more than the capitalization of all the listed stocks in the U.K. It is greater than the GDP of Japan. Nvidia, with its graphic processing units, has little competition for top-level AI chips used in data centers, but that is going to change. There is too much money to be made.

Broadcom, a semiconductor company with a niche in AI chips called application-specific integrated circuits, which have specialized functions, is the change agent. It became the newest member of the TDC in December 2024 after its stock price increased by a factor of six in four years. Value Line expects earnings to continue rising at a 24.5% annualized clip through 2030.

Broadcom, like Nvidia, does not own manufacturing plants, or "fabs." That allows the company to retain its capital, but it also leaves it vulnerable to supply interruptions. My other worries about the future of the chip business are government intervention, geopolitical threats and a lack of electricity to power data centers in the U.S.; still, it’s hard not to like Broadcom.

Tesla, which reached $1 trillion in market cap in October 2021, then fell out of the club a few times and came back in, looks more attractive now that its CEO is getting back to work. I am especially excited about its battery storage business.

But Tesla is clearly a meme stock, driven by the enthusiasm of fans. Its revenues have been flat for three years, profits are microscopic by TDC standards, and capital spending requirements are huge.

The outlier, Berkshire, has a P/E in the mid-20s and a brilliant CEO in his nineties. I'm loyal to Warren Buffett and confident in his successors. Berkshire has a hoard of liquid assets, and insurance is the best business in America outside of tech.

When I wrote about trillion-dollar stocks in 2021, I warned about "a sort of law of financial gravity." It's not hard to imagine a stock with a market cap of $100 billion becoming a four-bagger (that is, quadrupling in value) or even a 40-bagger, as Nvidia has proven.

But could Nvidia quadruple from its current value? Could Microsoft or Apple, at $3.8 trillion each? It seems doubtful. Still, doubles or triples are satisfying.

The legacy TDC companies have shown a remarkable ability to innovate and adapt. Operating-system software, for example, used to dominate Microsoft's revenues. Now, it represents only about one-tenth of sales. Server and cloud services account for 40% today, with gaming and LinkedIn making significant contributions.

These are truly exceptional businesses with extensive moats and deep human capital. As crazy as it sounds, they deserve to be trillion-dollar companies — and to keep growing.

James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. Of the stocks mentioned here, he owns Amazon.com. You can reach him at JKGlassman@gmail.com.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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The three main U.S. equity indexes gapped up at the opening bell Wednesday, rallied all day, and will carry four straight days of gains into the Thanksgiving holiday. Markets reflect resurgent bullishness about AI and tech as well as refreshed hope for a December rate cut.

Incoming economic data continue to support the idea of another rate cut at the next Fed meeting. The Department of Labor said weekly jobless claims declined by 6,000 to 216,000 for the week ending November 22, below a consensus forecast of 225,000. The four-week moving average declined by 1,000 to 224,000.

Continuing claims for the week ended November 15 were 1,960,000 vs 1,953,000 for the prior week and a Wall Street estimate of 1,963,000. And the Census Bureau said durable goods orders increased by 0.5% month over month in September, in line with expectations.

"With no other major data release scheduled before December 9-10," Goldman Sachs economist Joseph Briggs writes, "the September jobs report may have sealed a 25-basis-point cut at the December 9-10 FOMC meeting."

Briggs assumes the Fed will cut in March and June as well, leaving the target range for the federal funds rate at 3.00% to 3.25%. "Tariff pass-through has kept inflation near 3%," the analyst observes, "but should abate in 2026."

Fed funds futures pricing has been volatile amid an absence of economic data collected and released by the federal agencies during a record-long government shutdown. CME FedWatch shows an 84.9% probability the Fed cuts interest rates next month, up from 30.1% a week ago and vs 91.7% a month ago.

At the closing bell, the tech-heavy Nasdaq Composite was up 0.8% at 23,214 to put the finishing touches on its best Thanksgiving Week since 2008, according to Dow Jones Market Data.

The blue-chip Dow Jones Industrial Average was up 0.7% at 47,427. Papa Dow goes into the holiday on a four-day, 1,675-point rally. The broader S&P 500 had added 0.7% to 6,812 and, like the Dow, has posted its best Thanksgiving Week rally since 2012.

Will Alphabet or Apple catch Nvidia?

Alphabet (GOOGL, -1.1%) cooled off a day after a report that Meta Platforms (META, -0.4%) is considering Google-produced chips to run its data centers was interpreted as a threat to Nvidia (NVDA, +1.4%) as the leader of the AI revolution.

GOOGL stock is up 24.4% this month with only Friday's short trading session left on the calendar. (Note the stock market closes at 1 pm Eastern Standard Time, and the bond market closes at 2 pm on Black Friday.)

NVDA, despite another stellar earnings report and more staggering commentary from CEO Jensen Huang, is down 4.5% in November. META, meanwhile, is off 13.8% this month.

Apple (AAPL, +0.2%), on the other hand, is going higher again and is approaching new all-time-high territory after posting a 5.5% gain so far in November. At $4.102 trillion, it's edging closer to Nvidia ($4.380 trillion) for leadership atop the global market cap rankings.

Apple is seeing strong demand for its new iPhone lineup, and it is not subject to the same sort of speculation about return on invested capital related to massive AI infrastructure ventures as the so-called hyperscalers.

Alphabet is now No. 3 in the rankings, followed by Microsoft (MSFT, +1.8%), Amazon.com (AMZN, -0.2%) and Broadcom (AVGO, +3.3%). Meta is No. 7, while the seventh member of the Magnificent 7, Tesla (TSLA, +1.7%), is No. 10 – and potentially climbing on its own AI chip ambitions.

Deere in the headlights

Deere (DE, -5.8%) took its turn on a relatively quiet earnings calendar and closed at its lows of the day after the world's leader in farm equipment sales warned tariffs will continue to impact its business.

Deere reported fiscal 2025 fourth-quarter earnings of $3.93 per share, better than the $3.84 analysts expected but down from $4.55 a year ago. Revenue was up 14% to $10.58 billion and beat a Wall Street estimate of $9.83 billion.

"This past year brought its share of challenges and uncertainty," CEO John May said in a statement, "but thanks to the structural improvements we’ve made and the diverse customer segments and geographies we serve, we were able to achieve our best results yet for this point in the cycle."

May said management believes 2026 "will mark the bottom of the large ag cycle," though Deere will face ongoing margin pressures from tariffs and other persistent challenges for the sector. Deere forecasts net income for fiscal year 2026 of $4.00 billion to $4.75 billion.

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Stocks were volatile Tuesday, as volume thinned out ahead of Thanksgiving. As a reminder, the stock and bond markets are closed on Thursday for the holiday and will close early on Black Friday. Today, tech stocks remained in focus as AI bubble worries lingered, while several retailers rallied thanks to upbeat earnings reports.

After tumbling to notable losses in mid-morning trading, the blue-chip Dow Jones Industrial Average closed up 1.4% at 47,112, the broader S&P 500 added 0.9% to 6,765, and the tech-heavy Nasdaq Composite gained 0.7% to 23,025.

Nvidia (NVDA) was the worst Dow Jones stock today, shedding 2.6% after The Information suggested that Meta Platforms (META, +3.8%) is considering using chips from Alphabet's (GOOGL, +1.5%) Google to run its data centers.

This sparked "fears that Nvidia's AI monopoly may be ending," says Louis Navellier, chairman and founder of Navellier & Associates. "This is an interesting report, but so far, there is no reaction from the analyst community, which is forecasting 66.4% annual sales growth and 70.9% forecasted earnings growth for Nvidia."

It's been a rough month for NVDA – down 12% so far – on concerns the AI trade has run too far, too fast. But Wall Street remains overwhelmingly bullish toward the tech stock.

Of the 64 analysts covering Nvidia who are tracked by S&P Global Market Intelligence, 49 say it's a Strong Buy, 11 have it at Buy, three rate it at Hold and one has it at Strong Sell. This works out to a consensus Strong Buy rating.

Abercrombie, Kohl's surge roughly 40% apiece after earnings

While several tech stocks struggled on Tuesday, a number of retailers had really good days. Abercrombie & Fitch (ANF), for one, jumped 37.5% after the specialty apparel retailer reported higher-than-expected fiscal third-quarter results as solid growth in its Hollister segment offset weakness in its namesake brand.

For its fourth quarter, Abercrombie expects revenue growth of 5% at the midpoint – below analysts' estimates – on inline earnings of $3.55 per share. For the full fiscal year, the retailer is calling for revenue growth of 6.5% at the midpoint, slightly higher than the 6.2% Wall Street expects.

Kohl's (KSS) was another big post-earnings winner, climbing 42.5% after the department store chain disclosed fiscal third-quarter earnings of 10 cents per share – beating analysts' estimates for a per-share loss of 20 cents. Revenue also came in higher than anticipated.

"While these results are encouraging, we continue to operate in an environment where our customers are becoming increasingly choiceful as their discretionary income remains pressured," said Michael Bender, who on Monday was named CEO of the retailer after serving in the role on an interim basis for the past six months.

This is especially true among low to middle-income consumers and younger customers, Bender added, noting that he expects this consumer behavior "to continue into the fourth quarter as we believe the macroeconomic environment will remain uncertain."

Rate-cut hopes rise after September retail sales data

In economic news, the Census Bureau said retail sales edged up 0.2% from August to September, missing economists' forecasts for a 0.3% rise and signaling a sharp deceleration from July and August.

Meanwhile, the Bureau of Labor Statistics said its Producer Price Index (PPI), which measures what businesses are paying suppliers for goods and services, rose 0.3% month over month in September and was 2.7% higher year over year.

Core PPI, which excludes volatile food, energy and trade-related costs, was up 0.1% from August to September and 2.7% from the year prior.

"Producer inflation for final demand excluding food and energy was almost flat," says Scott Helfstein, head of investment strategy at Global X. "This suggests that tariffs are not really playing a major role across the economy more broadly. Companies are managing their costs and that is turning up in the data."

Helfstein believes the two shutdown-delayed economic reports will do little to move the Federal Reserve's rate-cut plans and expects the central bank to lower interest rates at its December meeting.

The odds of this occurring are on the rise. According to CME FedWatch, futures traders are pricing in an 83% probability of a quarter-point rate cut next month, up from 50% one week ago.

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Renewed hope for another rate cut in December and refreshed faith in the AI trade carried stocks to a second day of gains to start Thanksgiving week. The Nasdaq led the S&P 500 and the Dow Jones Industrial Average higher as investors, traders and speculators await more shutdown-delayed economic data amid a slowdown for earnings flow.

Markets are closed on Thursday for the Thanksgiving holiday, while the stock and bond markets will close early on Friday. Still, the economic calendar includes initial jobless claims for the week ending November 21. We'll also see retail sales and the Producer Price Index (PPI) for September, as well as consumer sentiment data from The Conference Board on Tuesday morning.

"The big bounce in the stock market is being fueled by rising odds for a December 10 key interest rate cut," observes Louis Navellier of Navellier & Associates, citing public statements from New York Fed President John Williams and Fed Governors Stephen Miran and Christopher Waller in support of lower interest rates because of a weakening labor market. That's despite a solid September jobs report.

Futures market pricing currently shows an 80.9% probability the central bank will trim the target range for the federal funds rate by another 25 basis points to 3.50% to 3.75% at the next Fed meeting in December. That's up from 71.0% on Friday and 42.4% last Monday, according to CME FedWatch.

Navellier also notes a consensus forecast for a 0.4% month-over-month retail sales increase in September. "Walmart (WMT, -1.2%) has already provided positive guidance," he adds, "and I also expect Costco (COST, -1.4%) to report strong same-store sales growth." Costco will report fiscal 2026 first-quarter results in mid-December and provide additional insight on the U.S. consumer.

At Monday's closing bell, the tech-heavy Nasdaq Composite had climbed 2.7% to 22,872, the broader S&P 500 had added 1.6% at 6,705, and the blue-chip Dow Jones Industrial Average had risen 0.4% to 46,448.

Elon Musk tweets himself even richer

Tesla (TSLA, +6.8%) stock took a big leap toward the lofty goals that define CEO Elon Musk's $1 trillion pay package on a single tweet from CEO Elon Musk. TSLA was up as much as 7.5% intraday and added nearly $90 billion to its market cap by the time the closing bell rang. The stock surge lifted Musk's net worth by about $20 billion.

"Most people don't know that Tesla has had an advanced AI chip and board engineering team for many years," Musk tweeted on Sunday. "That team has already designed and deployed several million AI chips in our cars and data centers. These chips are what enable Tesla to be the leader in real-world AI."

The CEO added that Tesla is using version AI4 of its chips in its cars, is "close to taping out" AI5, and is "starting work" on AI6. "Our goal is to bring a new AI chip design to volume production every 12 months," Musk said.

"We expect to build chips at higher volumes ultimately than all other AI chips combined. Read that sentence again, as I'm not kidding," he advised, predicting that Tesla's chips "will profoundly change the world in positive ways."

After Nvidia

The earnings front is relatively quiet in the aftermath of another revolutionary report from Nvidia (NVDA, +2.1%) and "Godfather of AI" Jensen Huang last Wednesday. But a couple of other AI-related and retail names are notable for the perspective they offer on the big picture.

Mid-cap semiconductor stock Semtech (SMTC, +9.7%) and AI-powered robotics outfit Symbotic (SYMB, +3.4%) report after the close today, while Best Buy (BBY, -1.1%) and Kohl's (KSS, +0.3%) are up before the opening bell on Tuesday.

Tesla competitor Li Auto (LI, +0.6%) and farm equipment maker Deere (DE, +0.01%) report on Wednesday morning.

Things might get a little more explosive when NANO Nuclear Energy (NNE, +1.7%) – an emerging leader of a nuclear revolution underpinned by the AI revolution – reports fiscal 2025 fourth-quarter results after the close on Wednesday.

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Stocks were choppy to start Friday, but took a notable turn higher after a speech from New York Fed President John Williams temporarily eased rate-cut worries. Still, the main indexes finished with big weekly losses – putting them on track for their worst November in years.

The Federal Reserve lowered the federal funds rate by a quarter-percentage point at its September and October meetings. And one month ago, futures traders were pricing in 98% odds of another rate cut in December. But expectations eased back in recent weeks after Fed Chair Jerome Powell said a December cut wasn't a sure thing and the September jobs report came in stronger than expected.

According to CME FedWatch, the probability of a quarter-point cut when the Fed concludes its next gathering on December 10 is now at 72% – up from 39% one day ago – after Williams, one of the highest ranked Fed officials, said Friday that he sees "room for a further adjustment in the near term" to bring interest rates closer to neutral.

"My assessment is that the downside risks to employment have increased as the labor market has cooled, while the upside risks to inflation have lessened somewhat," Williams said in his speech to economists in Santiago, Chile. "Underlying inflation continues to trend downward, absent any evidence of second-round effects emanating from tariffs."

"Economic data also supported the recovery [in stocks], as Flash PMIs signaled the fastest pace of growth this month since July, bolstering optimism about corporate earnings resilience," says José Torres, senior economist at Interactive Brokers.

Indeed, S&P Global's Flash Composite Purchasing Managers Index (PMI) and its Services PMI both hit a four-month high in November.

"The flash PMI data point to a relatively buoyant U.S. economy in November, signaling annualized GDP growth of about 2.5% so far in the fourth quarter," says Chris Williamson, chief business economist at S&P Global Market Intelligence. "The upturn also looks encouragingly broad-based for now, with output rising across both manufacturing and the vast services economy."

Not all the news was good news, though, with the Flash Manufacturing PMI hitting a four-month low. According to Williamson, manufacturers "reported a worrying combination of slower new orders growth and … accumulation of unsold inventory."

At the close, the tech-heavy Nasdaq Composite was up 0.9% at 22,273, the broader S&P 500 was 1.0% higher at 6,603 and the blue-chip Dow Jones Industrial Average had gained 1.1% to 46,245.

Bitcoin sinks to its lowest level since April

While the stock market managed a late-week turnaround, bitcoin did not. The price of bitcoin, which trades 24 hours a day, was last seen down 2% to trade at $84,432 – the lowest it's been since late April. The cryptocurrency has now shed nearly 33% since its early October peak above $126,000.

"The damage in the crypto sector, always volatile, is now the worst since 2022, says Louis Navellier, chairman and founder of Navellier & Associates. "Often seen as an indication of risk sentiment, the huge correction is now forcing liquidation among several dealers and has caused a selloff of all the alternative coins."

Bernstein analyst Gautam Chhugani isn't overly worried about the slump. "We believe institutional (and eventually sovereign) ownership of bitcoin is a structural long-term trend and the current price action reflects a (relatively) shallow and short-term correction."

Gap earnings help retail stock extend its rebound

In single stock news, Gap (GAP) shares surged 8.2% after the specialty apparel retailer reported higher-than-expected third-quarter earnings and revenue and same-store-sales growth of 5%. Gap also raised the bottom end of its full-year sales forecast.

The retail stock is now up nearly 27% from its mid-October lows, but Morgan Stanley analyst Alex Straton thinks there's more room to run. The analyst reiterated her Overweight (Buy) rating on Gap after earnings and lifted her price target to $31 from $30 – representing implied upside of 24% to current levels.

"GAP's Q3 print offers further evidence that management's brand reinvigoration initiatives are proving successful, with performance becoming increasingly more consistent," Straton says.

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Look at the numbers: From 1965, the year Buffett took over a struggling textile company, through the end of 2024, Berkshire’s shares rose 5,502,284%. That’s an annual compounded return of 19.9%. Over the same six decades, the S&P 500 index rose just 39,054% or 10.4% annually.

“Buffett is the most legendary investor in the history of investing,” says Adam Patti, CEO of exchange-traded fund company VistaShares. “And he has changed the way people invest.”

Now the question is which investor will take over as king or queen of investing. Whoever that will be will have some large boots to fill.

The long view

Long before taking over Berkshire Hathaway, Buffett was learning. His investing journey began early. He purchased his first stock at the age of 11, buying three preferred shares of Cities Service, a utility and oil company, and making a profit of around 5%. (Note: A basic element of Buffett’s investing strategy is to buy and hold, as he says, “forever.” Cities Service eventually became part of Occidental Petroleum, of which Berkshire is the largest shareholder.)

Years later, after studying at Columbia University under the legendary Benjamin Graham, who pioneered the concept of “value investing,” and earning a master’s degree, Buffett created the Buffett Partnership investment firm in 1956. Nine years later, Buffett went on to lead Berkshire Hathaway with the intent of converting it into a diversified holding company. Munger joined up in 1978. They ditched the textiles business in 1985 to focus on buying well-run businesses and taking big stakes in public companies.

The magic of Buffett and Munger's investment philosophy was simple in theory. “The best way to summarize what Buffett did, was to be patient and be prudent,” says Cathy Seifert, an equity analyst at research company CFRA. “Those two attributes served him well, and they weren’t so radical.”

That long-term view differed from many investors who looked for short-term gains, much like a professional market trader. Patti dubs it “rapid fire trading.” While that might work for Wall Street pros, it tends to be a losing strategy for amateurs.

When Berkshire bought controlling interests in companies, it did so with the radical idea of keeping the founders and other existing managers, Seifert says. Corporate takeovers typically involve firing top management and replacing them with executives from outside the company.

Plenty of cash

Berkshire has also benefited from holding insurance companies that generate massive cash flows each year, allowing it to buy more stock holdings, Seifert says.

Famously, Buffett would only buy companies that he understood. He passed on those that he didn’t understand. In line with a cautious approach, he famously said, “Buy when there is blood in the streets.” The idea is to purchase shares at low prices and avoid paying more than the underlying value of any investment.

Although Buffett plans to remain as chairman of Berkshire’s board, by the end of this month, Greg Abel, 63, a Canadian who has a background in the energy business, is expected to take over as CEO and the running of the company. It’s unknown how, or if, Abel will change Berkshire’s investment strategy.

New faces coming up

But a bigger question may be who will be the pretenders to the Wall Street throne as the record-breaking Wall Street investor?

The names that pop up are those who have forged their career and steeled their resilience in the financial markets. The following Wall Street veterans look like probable contenders.

Bill Ackman, known as an activist investor who founded Pershing Square Capital Management. In the last decade, Pershing’s total return was 153% or almost 10% annually, according to Stockcircle.

David Tepper is famous for running a hedge fund and is an expert on distressed debt. Returns of the last 10 years totaled approximately 225% or 12.5% a year, according to Stockcircle.

Ray Dalio founded Bridgewater Associates in 1975. His skill is not in doubt, but the annualized returns of the Bridgewater Associates Portfolio over the last 10 years have been modest, at around 5.4%, according to Stockcircle.

Daniel Loeb, a well-known investing activist and founder of Third Point Management, is also a successful hedge fund manager. Annualized returns of the last decade through 2024 were 5.2%, according to data from Third Point Investors.

Cathy Wood is famous for taking big bets in her Ark Invest tech-focused portfolio and promoting her investing philosophy on TV. The ARK ETF produced annualized total returns of 17.8% over the last decade, according to Morningstar data.

However, George Soros may take the cake for investing if he can be persuaded to do so. He’s the founder of the Quantum Fund and still advises it. The fund returned annual gains of 30% a year between 1970 and 2000, including a 1992 windfall when Soros famously shorted the British pound.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.

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Stocks shot higher out of the gate Thursday with bulls encouraged by Nvidia's (NVDA) earnings report and stronger-than-expected September jobs data. However, the tide quickly turned and all three main indexes were staring at stiff losses by lunchtime as the AI bellwether turned lower and odds for a December rate cut dwindled.

At Thursday's open, stock market gains ranged between 1.3% and 2.1%. But at the close, the blue-chip Dow Jones Industrial Average was down 0.8% at 45,752, the broader S&P 500 was off 1.6% at 6,538, and the tech-heavy Nasdaq Composite had slumped 2.2% to 22,078.

Nvidia's Q3 earnings report hit all the high notes – top- and bottom-line beats, upbeat guidance and confirmation of $500 billion in forward orders for the company's Blackwell and Rubin chips.

Shares rose roughly 6% in Wednesday's after-hours session and opened Thursday more than 4% higher. But NVDA was down 3.2% at the close – making it one of the worst-performing Dow Jones stocks of the day – as AI bubble worries resurfaced.

"The staggering amounts of capital that the hyperscalers are investing in AI infrastructure has made investors wonder if there will ever be a pay-off big enough to justify the outlays," says Jim Kelleher, director of research at Argus.

While Kelleher believes AI has "many more chapters to be written as possibly the most transformative technology since the internet," it's less clear "how it will perform as an investment vehicle in the intermediate term."

September jobs report keeps the odds of a December rate cut low

Weighing on sentiment was the shutdown-delayed release of the September jobs report, which showed a strong headline beat – 119,000 jobs added vs 50,000 expected – but an increase in the unemployment rate to 4.4%.

The report also showed downwardly revised figures for July and August, resulting in 33,000 fewer jobs combined in those two months than previously reported.

The September jobs report "added fresh uncertainty to the Federal Reserve's December 10 policy decision," says Richard Potts, economist at Bondford. "Ultimately, this was a jobs report with something for everyone. The headline strength argues against an immediate rate cut, but the underlying softness gives policymakers room to move if they choose."

The data leave a divided Fed with a tough call in December. According to CME Group FedWatch, futures traders are currently pricing in a 60% chance the central bank will keep the federal funds rate unchanged when it meets next month – down from 70% one day ago but up from 1% one month ago.

Walmart shines after earnings

Not all of the day's news was doom and gloom. Walmart (WMT) shot up 6.5% after the world's largest retailer reported higher-than-expected fiscal 2026 third-quarter earnings and revenue. It also raised its full-year forecast.

"WMT continues to block and tackle, which is exactly what investors would like to see after the CEO change from Doug McMillon to John Furner," says David Wagner, head of equity and portfolio manager at Aptus Capital Advisors. "It shouldn't be a surprise that this transition coincided with a very WMT-esq report via a beat and raise and strong commentary around positioning."

Wagner adds that long term, he'd be a buyer of the Dow stock on any omnichannel weakness "as margin expansion continues to outperform peers."

In a separate announcement, Walmart said it will move its common stock listing to the Nasdaq from the New York Stock Exchange (NYSE), effective December 9. Its ticker symbol will not change.

"Moving to Nasdaq aligns with the people-led, tech-powered approach to our long-term strategy," said Walmart Chief Financial Officer John David Rainey. "Walmart is setting a new standard for omnichannel retail by integrating automation and AI to build smarter, faster and more connected experiences for customers, while enabling our associates to deliver even greater value at scale."

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Stocks rallied hard to start Wednesday, but the enthusiasm quickly faded as market participants looked ahead to tonight's highly anticipated earnings report from Nvidia and tomorrow morning's delayed release of the September jobs report.

At the close, the broader S&P 500 was 0.4% higher at 6,642 and the blue chip Dow Jones Industrial Average had added 0.1% to 46,138 – snapping their four-day losing streaks – while the tech-heavy Nasdaq Composite was up 0.6% at 22,564.

Nvidia's third-quarter results and forward guidance will give Wall Street a better read on demand for artificial intelligence chips, particularly amid growing concerns about an AI bubble.

While NVDA closed today up 2.9%, the blue chip stock is down more than 8% for the month to date on worries valuations in several mega-cap stocks have become too frothy.

But James Demmert, chief investment officer at Main Street Research, says this "brief reset ... means the stock now has a slightly lower bar to clear post-earnings." Demmert expects "Nvidia to exceed estimates and provide future earnings and revenue guidance that is higher than investors expect."

He adds that it is "unlikely that Nvidia has seen any slowdown in demand for its products, even with increased competition, given how early we are in the AI cycle."

As for concerns over a potential AI bubble, the CIO reminds us that "all technology revolutions create bubble-like stock price performance," and excitement over all things artificial intelligence is currently expanding at a healthy pace.

While valuations are indeed lofty, Demmert says they're still trading at a discount to earnings growth rates, and sentiment has not yet reached the euphoric stage that signals a market top.

You can follow along with all the latest Nvidia earnings news on our live blog.

Semrush soars on Adobe buyout buzz

Elsewhere in the AI space, Creative Cloud parent Adobe (ADBE, -2.0%) said it will buy digital marketing platform Semrush (SEMR) for $1.9 billion in cash, or $12 per SEMR share. This represents a 77.5% premium to the tech stock's Tuesday close – and the announcement sent Semrush shares 74% higher on Wednesday.

"Brand visibility is being reshaped by generative AI, and brands that don't embrace this new opportunity risk losing relevance and revenue," said Anil Chakravarthy, president of Adobe's Digital Experience Business, in the press release. "With Semrush, we're unlocking GEO [generative engine optimization] for marketers as a new growth channel alongside their SEO, driving more visibility, customer engagement and conversions across the ecosystem."

William Blair analyst Jake Roberge reiterated his Outperform (Buy) rating on Adobe stock earlier this week.

"While recent competitive noise and seat growth questions in the creative ecosystem have added a layer of complexity to the story, we believe Adobe can durably grow earnings at a low- to mid-teens pace over the next two to three years," Roberge wrote in a note to clients. "Therefore, we believe the stock is compelling for long-term shareholders."

The September jobs report will finally be released

In economic news, Wall Street will be tuned into tomorrow morning's release of the September jobs report, which was delayed from its initial October 3 release date due to the record-long government shutdown.

Data released over the summer showed a concerning slowdown in the labor market, which prompted the Federal Reserve to cut interest rates by a quarter-percentage point at both its September and October meetings.

But expectations of a third straight rate cut at the next Fed meeting in December have declined in recent weeks amid a lack of concrete economic data. And today's release of the minutes from the October Fed meeting shows central bank officials were split on any additional rate cuts this year.

"Several participants assessed that a further lowering of the target range for the federal funds rate could well be appropriate in December if the economy evolved about as they expected over the coming intermeeting period," the minutes stated (PDF). "Many participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for the rest of the year."

As of November 19, CME Group FedWatch assigns a 34% chance the Fed will cut rates in December, down from 94% one month ago.

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Five of the 11 S&P 500 sectors were down for the day, with declines for consumer discretionary, industrial, utility, financial and technology stocks dramatized by downgrades for big names in three of them. Major questions about the sustainability and the profitability of capex spending for new computing power continue to color this week's price action. Worried about an AI bubble? So is Wall Street.

Meanwhile, the Census Bureau said factory orders increased 1.4%‌ month over month in August, in line with expectations, following a 1.3% decline in July. Orders were up 3.3% year over year. And the National Association of Home Builders Housing Market Index ticked up to 38 in November from 37 in October, but remains in contraction territory.

Interest rates and the next Fed meeting remain key issues for investors, traders and speculators with the August jobs report now set for release Thursday morning.

But the main event is on the earnings calendar. And it's happening after tomorrow's close.

At Tuesday's closing bell, the tech-heavy Nasdaq Composite was down 1.2% at 22,432, the blue-chip Dow Jones Industrial Average had fallen 1.1% to 46,091, and the broad-based S&P 500 was off 0.8% at 6,617.

HON hit with double downgrade

Honeywell (HON) sank 2.4% after BofA Securities analyst Andrew Obin double downgraded the industrial stock to Underperform, or Sell, from Buy. Obin also reduced his 12-month target price on HON from $265 to $205.

Obin, who notes the conglomerate is separating into two businesses in the second half of 2026, Honeywell Aerospace and Honeywell Automation, says the company has fallen short with its plans for management as well as its earnings forecasts.

"EPS growth has lagged peers," the analyst concludes, "which we expect to continue despite M&A."

MSFT and AMZN get downgraded too

Amazon.com (AMZN) and Microsoft (MSFT), two of the so-called hyperscalers driving exponential growth in AI infrastructure spending, caught downgrades from Rothschild & Co Redburn analyst Alexander Haissl.

Haissl's primary contention is that capital intensity for the generative AI buildout is "significantly higher" compared to cloud computing, while pricing power is notably weaker."

Haissl cut both stocks from Buy to Neutral, or Hold. He maintained his 12-month target price of $250 for AMZN. His new 12-month target price for MSFT is $500, down from $560.

All about Nvidia and the earnings calendar

Home Depot (HD) was the worst of the 30 Dow Jones stocks on Tuesday after the home improvement retailer reported EPS of $3.62 (-1.4% year over year) on sales of $41.35 billion (+2.8% YoY). Analysts expected $3.84 on $41.15 billion. Comparable sales were up 0.2% vs a consensus forecast of 1.3%.

Home Depot said full-year comparable sales would be slightly positive vs a previous forecast of growth of up to 1%. And management now expects EPS to be down 5%, worse than its previous guidance for 2% deterioration. HD shed 6.0%

Despite the top-line recovery, margins remain soft due to increased operating expenses, tariffs on imported goods, rising wages and logistics costs, according to Zacks Investment Management Senior Client Portfolio Manager Brian Mulberry.

"The lack of turnover in the housing market and high financing costs have tapered consumer spending on bigger projects and appliances," Mulberry explained. "That said, by the middle of next year, rates will be lower and other cost structures should move from a headwind to a tailwind, and the long-term growth looks better than the near term."

For the record, Nvidia (NVDA) was down 2.8%. Be sure to tune in to our live Nvidia earnings blog for the latest commentary, numbers when they come out and CEO Jensen Huang's press conference.

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The Census Bureau announced late Friday that it would publish August construction spending data today, as it updates its release calendar in the aftermath of the government shutdown. The agency will provide the release schedule as soon as it becomes available.

And we will update our economic calendar accordingly. Meanwhile, construction spending grew an estimated 0.2% in August, a third straight monthly gain reflecting a rise in residential home improvement spending over the summer even as nonresidential spending trended lower.

"All told," write Wells Fargo economists Charlie Dougherty and Ali Hajibeigi, "the modest upturn in total spending is an encouraging sign that activity might be starting to stabilize," though they note that high interest rates and elevated building costs are still a "significant limitation" on upside from here.

The Census Bureau will follow up on Tuesday with the August factory orders report and on Wednesday with the August trade report. All three releases were due in early October. And the Bureau of Labor Statistics said the September jobs data will arrive on Thursday.

At Monday's closing bell, the blue-chip Dow Jones Industrial Average was down 1.2% at 46,590, the broad-based S&P 500 had fallen 0.9% to 6,672, and the tech-heavy Nasdaq Composite was off 0.8% at 22,708.

GOOGL is a Warren Buffett stock

Berkshire Hathaway (BRK.B, -1.1%) bought $4.3 billion worth of Alphabet (GOOGL, +3.1%) during the third quarter, establishing a new position that accounted for 1.6% of its portfolio. This makes the Google parent Berkshire's 10th-largest equity holding as of September 30 – and the newest Warren Buffett stock.

According to CFRA Research analyst Angelo Zino, "The move validates [Alphabet's] strong fundamentals and provides Berkshire exposure to a leading AI provider through Google Cloud and Gemini expansion."

Zino, who rates GOOGL a Buy with a 12-month target price of $330, cites the high free cash flow potential of Alphabet's core advertising business and an attractive valuation of about 22 times estimated 2027 earnings per share "amid a healthy top-line growth trajectory" for Berkshire's move.

Alphabet also announced a $40 billion investment in new AI-focused data centers and supporting infrastructure in Texas through 2027.

More Warren Buffett stocks

With the Oracle of Omaha retiring, their second-to-last 13-F filing as an active couple reveals Buffett and Berkshire also sold $10.6 billion worth of Apple (AAPL, -1.8%) stock. They've sold down their Apple position from approximately 900 million shares at the end of 2023 to 238 million as of September 30.

AAPL remains Berkshire's largest holding at 22.7% of its portfolio. And Zino says the move merely reflects portfolio rebalancing ongoing for two years.

In addition to GOOGL, Berkshire bought $1.2 billion of Chubb (CB, +0.04%) stock, which now accounts for 3.3% of the holding company's portfolio.

American Express (AXP, -4.5%) was not one of the stocks Buffett bought and sold in Q3, and it remains the holding company's second-largest equity position at 18.8%. But AXP was at the bottom of the 30 Dow Jones stocks today.

Berkshire also maintained its position in troubled health care stock UnitedHealth Group (UNH, -0.4%) that it initiated in the second quarter. UNH was 0.65% of Berkshire's portfolio at the end of Q3.

Berkshire sold $1.9 billion worth of financial stock Bank of America (BAC, -2.1%), which represented about 11% of the portfolio, though it is still the No. 3 holding. It also sold $1.2 billion worth of VeriSign (VRSN, -1.1%).

All about Nvidia and the earnings calendar

Economic data is incoming again. But it's all about the earnings calendar and Nvidia (NVDA, -1.9%) this week. Come what may, you can track it all on our live Nvidia earnings blog.

"The key to a turnaround in the situation," says Louis Navellier of Navellier & Associates, "will be Nvidia's earnings this Wednesday. A positive surprise by NVDA and a recovery to new highs there, now down 12% from its all-time high, would re-energize the entire market."

Navellier notes that major investors such as Softbank and Peter Thiel have sold their entire NVDA positions and have "put a chill on the shares." He also cites "concerns about the circular financing agreements among the builders of the massive data center buildouts, which are the big buyers of Nvidia chips."

But, if CEO Jensen Huang and his company report "strong beats and, more importantly, strong guidance, these concerns will be mitigated and the AI theme will be reaffirmed, leading the market higher."

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Nvidia (NVDA) reported fiscal 2026 third-quarter earnings report after the November 19 close. Nvidia earnings have become one of Wall Street's most anticipated events thanks to snowballing demand for all things artificial intelligence (AI).

The leader of the AI revolution reported earnings of $1.30 per share (+60.5% year over year) on revenue of $57.01 billion (+62.5% YoY). Gross margin was 73.6% vs 75.0% a year ago.

Jensen Huang's outfit expects to report fiscal fourth-quarter revenue of $65 billion, "plus or minus 2%," and gross margin of 75%, "plus or minus 50 basis points."

Analysts were calling for earnings of $1.25 per share on revenue of $54.9 billion.

"A great earnings report with higher guidance from Nvidia really shouldn't surprise anyone, but it may reinforce concerns over seemingly limitless AI capital budgets," says Dennis Follmer, chief investment officer at Montis Financial.

Follmer adds that several hyperscalers have already announced increased capital expenditures, so it will likely be another strong quarter for Nvidia. "And more importantly, we should expect the bigger hyperscaler spending to be reinforced by Nvidia raising future expectations for sales and earnings, given they are the chip of choice for such projects."

The Kiplinger team reported live on Nvidia's third-quarter earnings report, bringing you the news and our expert analysis of what the results could mean for you and your portfolio. Scroll for the latest updates.

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Nvidia stock opens lower to start earnings week

Nvidia stock opened lower Monday morning, down 0.9% at last check. The chip stock is down more than 7% for the month to date, but has still gained nearly 42% since the start of the year.

This comes as the broader equities market trades cautiously higher at the start of the week, with the blue-chip Dow Jones Industrial Average up 0.04%, the broader S&P 500 0.1% higher and the tech-heavy Nasdaq Composite enjoying a 0.2% lead.

- Karee Venema

Can Nvidia earnings reignite the AI flame?

That's the question Matt Britzman, senior equity analyst at Hargreaves Lansdown, is asking.

"For the first time in several quarters, Nvidia enters earnings with sentiment under pressure. Shares have softened on concerns of an AI bubble and the reality that China sales are unlikely to rebound soon."

However, Britzman says the overarching picture for Nvidia "remains strong" and he believes third-quarter revenue will come in near the top end of guidance, "at around $55 billion – and scope for an upside surprise."

He believes market participants will be watching fourth-quarter guidance and any color for the year ahead.

"CEO Jensen Huang recently flagged $500 billion worth of orders on the books, and investors will be keen for clarity on timing, which could imply material upside to current forecasts. With plenty of nervousness in the air, strong results from Nvidia could be the perfect catalyst to reignite the AI flame," says Britzman.

- Karee Venema

Nvidia earnings: Harbinger of an AI bubble or proof the boom is real?

Ahead of Nvidia's earnings this week, Wall Street is worried that there's an AI bubble. In recent weeks, the sector has suffered from a spike in volatility.

According to Neil Azous, portfolio manager of Strategy Shares' Monopoly ETF (MPLY), the concerns may be overblown.

"For those worried about 'bubble' talk, the stock is already down heading into earnings, and historically every dip in Nvidia has proven profitable. The asymmetry — one day or seven days after earnings — has favored the upside. Betting against the most important company in the world, with the resources it has, has generally been a losing trade. Taken together, these factors could alleviate many current concerns," says Azous.

Brian Stutland, portfolio manager of the Rational Equity Armor Fund and the Catalyst Nasdaq-100 Hedged Equity Fund, agrees.

"The key is whether Nvidia continues hitting the targets analysts expect. Its forward price-to-earnings (P/E) ratio is around 31, which isn't extreme. This isn't like the late-'90s tech bubble, when major players traded at forward P/Es of 40 or 45," says Stutland.

He adds that Nvidia's valuation is reasonable and the company's growth helps justify it. "I'm not convinced we're at the tail end of a bubble. It would likely take a major catalyst to push the market significantly higher than expected, followed by a shakeout. As long as Nvidia delivers clarity through earnings and meets its growth targets, the higher multiples are justified, though there will still be volatility along the way."

Regardless, Nvidia is the clear bellwether. And even if there are a few small cracks in its growth story, it seems likely that the talk about the AI bubble will not go away.

- Tom Taulli

What time is Nvidia's earnings release?

Nvidia will release its fiscal third-quarter earnings report after the stock market closes on Wednesday, November 19. The results typically come through around 4:20 pm to 4:30 pm Eastern Standard Time.

The release of Nvidia's earnings report will be followed by a conference call, which will begin at 5 pm EST.

Firstrade's Stephen Callahan: What investors will be watching in Nvidia's earnings

Nvidia reports earnings on November 19, and Wall Street is looking for a 17% quarter-over-quarter increase in revenue to $54.9 billion and earnings of $1.25 per share (+19% from Q2).

According to Stephen Callahan, trading behavior analyst at Firstrade Securities, those numbers look about right. "While many expect the chipmaker to beat these estimates, I agree with these numbers," he says.

Nvidia's Blackwell chips are likely to see strong demand, especially with the growth in spending on AI infrastructure for data centers. "Long-term contracts with big clients have given the chipmaker a predictable revenue pipeline," Callahan notes.

But risks remain. "The tense trade relations between the U.S. and China pose potential land mines for the company," the analyst warns. "These include stricter regulations that could affect sales."

And the growing chatter about an AI bubble could weigh on Nvidia stock.

As for what investors will watch most closely? "Strong revenue growth from the data center sector" tops the list, along with guidance on future demand, China sales, profit margins and supply chain stability.

- Tom Taulli

Does Nvidia pay a dividend?

Nvidia pays a small quarterly dividend of 1 cent per share, which works out to 4 cents per share annually.

Based on the chipmaker's current stock price, this works out to a dividend yield of 0.02%. By comparison, the S&P 500's current dividend yield is 1.2%.

In fiscal 2025, Nvidia paid roughly $834 billion in dividends. It also bought back $33.7 billion in stock.

- Karee Venema

Related: The Kiplinger Dividend 15: Our Favorite Dividend-Paying Stocks

Hedge funds bought Nvidia stock in Q3

Nvidia shares outperformed the broader market in Q3, gaining 18.1% on a total return basis (price change plus dividends) vs the S&P 500's 8.1% total return.

During this July 1 through September 30 time frame, hedge funds were were net buyers of Nvidia stock.

According to WhaleWisdom, 48 hedge funds initiated new NVDA positions over the three-month period and 316 increased their stakes. This compares to 33 hedge funds that closed out of their Nvidia stakes entirely and 342 that reduced their positions.

The net change in hedge fund share ownership amounted to 4.6 million shares.

Related: Best Blue Chip Stocks: 21 Hedge Fund Top Picks

Peter Thiel's hedge fund sells Nvidia

As a group, hedge funds were net buyers of Nvidia in Q3, but one notable fund sold its stake in the chipmaker.

Thiel Macro, which is the namesake fund of Palantir Technologies (PLTR) board chair Peter Thiel, exited its stake in Nvidia in the third quarter. The fund first bought NVDA in Q4 2024 and the AI stock accounted for 40% of the portfolio at the end of Q2.

Regulatory filings reveal that Peter Thiel's hedge fund also sold off its entire stake in Vistra (VST), which provides energy for AI data centers, and slashed its stake in Tesla (TSLA) by 76%.

- Karee Venema

BofA Securities raises EPS estimates ahead of Nvidia's earnings report

BofA Securities analyst Vivek Arya raised his full-year earnings-per-share estimates for Nvidia ahead of the chipmaker's upcoming earnings report.

For fiscal year 2026, Arya now expects the company to report earnings of $4.56 per share, up from his previous estimate of $4.45 per share. He also increased his EPS guidance for fiscal 2027 (to $7.02 from $6.26) and fiscal 2028 (to $9.15 from $8.03).

The analyst reiterated his Buy rating and $275 price target, representing implied upside of nearly 50% to current levels.

"NVDA is the only merchant chip supplier with proven full-stack, rack-scale execution in large AI clusters, first with Blackwell (GB200), then with Blackwell Ultra (GB300) and next year in Vera Rubin (VR)," we'll likely have three generations of experience by the second half of calendar year 2026, says Arya.

He adds that cloud capex worries are often seasonal in nature – peaking in Q4 but easing at the start of the new year. And Nvidia is trading at an attractive valuation given its AI bellwether status and growth estimates.

Indeed, Nvidia CEO Jensen Huang said last month that the company has roughly $500 billion in total Blackwell and Rubin orders for this year and next – beating Wall Street's expectations by 10% to 15% – so most concerns will be more macro in nature, focusing on a tougher financing environment and increased competition.

- Karee Venema

Masayoshi Son and Peter Thiel unload Nvidia stock

Ahead of Nvidia's highly anticipated earnings report, some of the world's top tech investors have unloaded their positions in the stock. SoftBank, which Masayoshi Son operates, recently sold its remaining 32 million-share stake, netting $5.8 billion.

Then, as mentioned, there is Peter Thiel, who is the cofounder of PayPal and an early investor in Facebook. His hedge fund, Thiel Macro LLC, unloaded its position in Nvidia stock for about $100 million.

Granted, in light of the company’s massive market cap, these transactions are relatively small. Besides, Son has had a spotty track record with Nvidia stock. In 2019, he sold a $3.9 billion position. Had he held on, that stake would currently be worth about $150 billion.

Regardless, Son has become a billionaire because of his savvy, high-conviction investments. His move away from Nvidia may not signal bearishness on AI at all — but rather his belief that even bigger opportunities now exist within the category.

- Tom Taulli

The stock market closes lower to start Nvidia week

Stocks opened lower and recovered briefly but slid through the afternoon to begin a big week on the earnings front.

At Monday's closing bell, the blue-chip Dow Jones Industrial Average was down 1.2% at 46,590, the broad-based S&P 500 had fallen 0.9% to 6,672, and the tech-heavy Nasdaq Composite was off 0.8% at 22,708.

Nvidia, meanwhile, shed 1.9%.

"The key to a turnaround in the situation," says Louis Navellier of Navellier & Associates, "will be Nvidia's earnings this Wednesday. A positive surprise by NVDA and a recovery to new highs there, now down 12% from its all-time high, would re-energize the entire market."

Navellier notes that major investors such as Softbank and Peter Thiel have sold their entire NVDA positions and have "put a chill on the shares." He also cites "concerns about the circular financing agreements among the builders of the massive data center buildouts, which are the big buyers of Nvidia chips."

But, if CEO Jensen Huang and his company report "strong beats and, more importantly, strong guidance, these concerns will be mitigated and the AI theme will be reaffirmed, leading the market higher."

- David Dittman

Read more: Dow Falls 557 Points to Start NVDA Week: Stock Market Today

Nvidia weakness creates a "lower bar" for the chip stock to overcome, says Main Street Research CIO

Nvidia stock is poised for a lower open Tuesday, with shares down 0.9% at last check. NVDA has pulled back in recent weeks amid broader risk-off trading on Wall Street and concerns that the AI trade has run too far, too fast.

But James Demmert, chief investment officer at Main Street Research, says this "brief reset ... means the stock now has a slightly lower bar to clear post-earnings." Demmert expects "Nvidia to exceed estimates and provide future earnings and revenue guidance that is higher than investors expect."

He adds that it is "unlikely that Nvidia has seen any slowdown in demand for its products, even with increased competition, given how early we are in the AI cycle."

As for concerns over a potential AI bubble, the CIO reminds us that "all technology revolutions create bubble-like stock price performance," and excitement over all things artificial intelligence is currently expanding at a healthy pace.

While valuations are indeed lofty, Demmert says they're still trading at a discount to earnings growth rates, while sentiment has not yet reached the euphoric stage that signals a market top.

- Karee Venema

September jobs report release makes for a busy week on Wall Street

It's not only Nvidia earnings that Wall Street is waiting for this week. The highly anticipated September jobs report, whose release was delayed due to the record-long government shutdown, will be published ahead of Thursday's open.

Data released over the summer showed a concerning slowdown in the labor market, which prompted the Federal Reserve to cut interest rates by a quarter-percentage point at both its September and October meetings.

But expectations of a third straight rate cut at the next Fed meeting in December have declined in recent weeks amid a lack of concrete economic data.

"As of now, the odds of a rate cut in December have dropped to 45% after some caution and hawkish remarks from Fed officials," says Daniela Hathorn, senior market analyst at Capital.com. "The jobs data could skew this pricing if it confirms a further softening of the labor market, which would play into the narrative of a weakening U.S. economy, a key theme that has emerged in recent days and is driving some of the weakness in equities."

- Karee Venema

Related: When Is the Next Jobs Report?

Cloudflare outage resolved after temporary disruptions to ChatGPT, X and others

Cloudflare (NET) stock is tumbling today, down 3.5% at last check, after a major outage in the cloud services provider took down sections of the internet, including OpenAI's ChatGPT, X and DoorDash (DASH).

The issue has since been resolved, with Cloudflare noting that "the root cause of the outage was a configuration file that is automatically generated to manage threat traffic. The file grew beyond an expected size of entries and triggered a crash in the software system that handles traffic for a number of Cloudflare's services."

The company underscored that "there is no evidence that this was the result of an attack or caused by malicious activity."

On Monday, Cloudflare announced that it is buying Replicate, an AI platform used by developers to run artificial intelligence models. William Blair analyst Jonathan Ho says the acquisition will help NET advance "its vision of its Workers platform becoming a one-stop-shop for developers to build and run AI-powered applications by integrating Replicate and allowing users to easily deploy any AI model globally with just a single line of code."

Ho has an Outperform (Buy) rating on the tech stock, saying "investors should continue to own Cloudflare based on the potential for the company to execute near term as well as the central role it could play in the rapid shift toward an AI-centric internet."

- Karee Venema

AI bubble warnings grow louder ahead of Nvidia earnings

"No firm is immune if the AI bubble bursts." This is the warning from Alphabet (GOOGL) CEO Sundar Pichai, who told the BBC that the AI surge is "extraordinary," but shows "elements of irrationality."

He's not the only one raising concerns. Just look at Palantir Technologies (PLTR) CEO Alex Karp. While Karp says the market for AI is massive, he recently cautioned that the economic output may not match the cost of the infrastructure build out.

And then there's Michael Burry, of The Big Short fame. His recent warning suggests the Nasdaq-100 may have already peaked amid the AI spending boom, with Burry saying that "someone is going to lose a phenomenal amount of money."

With multiple heavyweights raising red flags, Nvidia's earnings this week won't just measure performance — they may gauge how much longer the AI boom can defy gravity.

- Tom Taulli

What would you have if you invested $1,000 in Nvidia 20 years ago?

Nvidia's share price has gone through some notable ups and downs over its 26 years as a publicly traded company, but its long-term trend has always been up and to the right.

Indeed, Nvidia has been one of the best stocks to own over that time frame and created more than $309 billion in shareholder value between January 1999 and December 2020, according to an analysis by Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University.

Over the past two decades, Nvidia stock generated an annualized total return of 38.5%. The S&P 500, with dividends reinvested, returned an annualized 10.9% over the same period.

In dollar terms, a $1,000 investment in Nvidia 20 years ago would be worth roughly $673,400 today. That same amount invested in the S&P 500 would theoretically be worth $7,900.

Microsoft, Nvidia and Anthropic go all in

On November 18, Microsoft (MSFT), Nvidia and Anthropic announced a massive strategic partnership. According to Microsoft's blog, Nvidia and Microsoft will invest up to $10 billion and $5 billion, respectively, in Anthropic.

At the same time, Anthropic committed to purchasing up to one gigawatt of compute capacity on Nvidia's future hardware, optimizing its models with the chipmaker, while scaling deployment across Microsoft Azure.

A report in The Wall Street Journal estimates that the total commitment from the artificial intelligence leaders is about $45 billion, making it one of the largest AI infrastructure deals ever.

This partnership signals more than just investment. It represents a deep intertwining of models, hardware and cloud infrastructure. For Microsoft, it means broadening its model ecosystem beyond one provider. For Nvidia, it means locking in demand for its next-gen chips. And for Anthropic, it means scale, capacity and market access.

Yet the timing — just ahead of Nvidia's earnings release — makes this a high-stakes moment for the entire AI sector. The question now: Can these billions translate into meaningful business outcomes, or will expectations outpace reality?

- Tom Taulli

What should you do with all that appreciated NVDA stock?

Even with its recent pullback, Nvidia stock is still up 40% for the year to date. And that's modest compared to its longer-term returns. Indeed, NVDA has generated an average annual return of almost 54% over the past 15 years, easily outpacing the S&P 500's 14.4% total return (price change plus dividends).

So what's an investor to do with all of their appreciated Nvidia stock? We turned to Charles Lewis Sizemore, CFA, chief investment officer and Kiplinger contributor, for advice.

One option is to take the money and run. "Having a disproportionate share of your portfolio in any single stock — even one as incredibly successful as Nvidia — is risky," says Sizemore. "Selling or at least trimming the position little by little could be smart risk management."

But selling isn't the only route you could take. In this article, Sizemore shares a few other potential scenarios for Nvidia investors who have capitalized on the stock's impressive run.

Read more: I'm 55 With 10 Years Until Retirement, and I've Made $2 Million on Nvidia Stock. What Do I Do with It Now?

Stifel raises its price target on Nvidia ahead of earnings

Stifel analyst Ruben Roy raised his price target on Nvidia stock to $250 from $212 ahead of earnings, representing implied upside of nearly 38% to its November 18 close.

"CEO Jensen Huang's recent keynote at GTC Washington D.C., outlined the company's ongoing positioning as the backbone of AI infrastructure underpinned by more than $500 billion in cumulative order book for Blackwell and Rubin infrastructure spanning 2025-2026," Roy says.

The analyst expects near-term debate to remain focused on the sustainability of AI investments, even with several hyperscalers announcing increased spending in their recent earnings reports.

"We believe that concerns regarding vendor financing loops, financial sustainability of several key AI players, and recent supply side issues have increased as well," Roy adds, though he notes that recent conversations and industry data points "suggest that AI compute demand is likely to scale higher."

And the analyst continues to believe Nvidia is best-positioned to benefit from this rising demand.

- Karee Venema

NVDA rises again in pre-market trading

Nvidia (NVDA) was down 2.8% on Tuesday to $181.36, extending its decline since hitting a new all-time high of $212.19 intraday on October 29 to 14.5%. The AI bellwether was rising again Wednesday morning in pre-market trading, ahead of its post-closing bell earnings announcement.

NVDA stock was up 1.7% about 15 minutes before the opening bell at the New York Stock Exchange – helped, perhaps, by another effusive note from Wedbush analyst Dan Ives.

Calling it a "foundational piece" of the AI revolution, Ives expects Nvidia to "handily exceed Street estimates given the plethora of positive data points we have picked up from our Asia supply chain checks." Ives also cites "monster Big Tech cap-ex numbers seen by the hyperscalers in late October earnings."

Wall Street expects earnings of $1.23 per share (+51.9% year over year) on revenue of $54.59 billion (+55.6% YoY). The consensus would also like to see fourth-quarter guidance for EPS of $1.37 on revenue of $59.60 billion.

"At a time with tech stocks volatile and investor worries around an 'AI Bubble'," Ives notes, "it all comes down to gauging the AI Revolution demand story which starts and ends with Nvidia."

The analyst says we'll "be able to hear a pin drop on Street trading desks as the entire global market will be carefully watching these results and commentary" from the "Godfather of AI," Nvidia CEO Jensen Huang, after the closing bell.

Ives has an Outperform, or Buy, rating on NVDA stock, with a $210 12-month target price.

– David Dittman

Gabelli PM: Why Nvidia's earnings could steer the entire market

With Nvidia set to report earnings later today, investor attention is sharper than ever — and for good reason.

As John Belton, portfolio manager at Gabelli Funds, notes, "Nvidia is the world's most valuable company and the largest constituent in the S&P 500, and its earnings are always closely followed by investors." He adds that this cycle carries even more weight given "the drawdown in U.S. stocks seen over the last few weeks."

Belton says Nvidia's results will offer a critical read on the health of AI spending: "Nvidia's earnings should provide an updated view of the demand environment for AI infrastructure, which we believe remains robust, supported by a broadening set of customers using the technology across a growing number of applications."

Looking beyond the quarter, Belton remains constructive on the broader tech landscape. "We think there is still runway for these companies to generate strong earnings growth over the coming years as AI adoption scales and use cases proliferate."

Nvidia's leadership remains key. The company "is the dominant player in AI semiconductors with a strong competitive position which looks defensible," Belton adds.

On valuations, he pushes back against bubble concerns: "The 'Magnificent 7' median forward P/E multiple has contracted roughly 10% … it is difficult to argue that we are in a valuation bubble currently."

- Tom Taulli

Big Tech, ROIC and NVDA

Jason Zweig writes a column for The Wall Street Journal called "The Intelligent Investor." He holds prime real estate at one of the world's premier financial publications.

His work is an homage to Charles Dow, who co-founded the WSJ and created the first stock market index, Benjamin Graham, who wrote the seminal book that lends his column its name, and Warren Buffett, Graham's most famous protege.

When Jason Zweig is writing about return on invested capital (ROIC) and Alphabet (GOOGL), Amazon.com (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT) and Nvidia (NVDA), as he did in his weekly newsletter on Tuesday, people are going to pay attention.

Zweig cites reporting in the WSJ by his colleagues Matt Wirz and Peter Rudegair: "Big tech companies are expected to spend nearly $3 trillion on AI through 2028 but only generate enough cash to cover half that tab."

And he adds his own color: "Between Sept. 1 and Nov. 13 – less than three months – big tech companies issued more bonds than they had in the previous three calendar years combined."

The problem, as Zweig sees it, is this: "Historically, software has been a 'capital-light' business whose own cash flows could finance most needs. Suddenly, however, the tech giants are becoming capital heavy."

Here's the bottom line: "What all this means is that AI had better turn out to be even more lucrative than the tech giants are projecting. Otherwise, these companies and their investors are going to be saddled with excess capital – and unsustainable valuations."

Investors, traders and speculators alike hope many questions about an AI bubble will be answered by Nvidia and CEO Jensen Huang after the closing bell.

– David Dittman

A quick correction

Writing with half an eye on big retail names joining Nvidia (NVDA) on the earnings calendar this week as well as the next Fed meeting in December, Louis Navellier of Navellier & Associates says, "The market correction appears to be over."

He adds, of course, "Nvidia's earnings tonight are pivotal."

Navellier notes that Lowe's (LOW) was up 5% after meeting revenue expectations and beating earnings forecasts but trimming its full-year profit forecast because of economic uncertainty.

"Interest rates remain flat," Navellier writes, adding that a rate cut by the Fed next month "will be bullish for stocks and would be very helpful for a year-end rally." He cautions that a 50-basis-point cut may generate recession fears.

"Nvidia is key because all the massive data center plans are wrapped around Nvidia chips," Navellier explains, "and the company has financial agreements with many of the AI players."

"A bullish report and forecast will invigorate Mega Tech, which very much steers the indexes, and index moves are what create the majority of buying and selling." NVDA stock was up 1.6% at last check.

– David Dittman

Jensen & Elon's Excellent Adventures

According to Reuters, Nvidia (NVDA) CEO Jensen Huang and Tesla (TSLA) CEO Elon Musk will discuss advances in AI and technology generally during a U.S.-Saudi Arabia investment forum in Washington on Wednesday.

"This conversation will explore the emerging forces shaping the next wave of technological progress," reads a document cited by Reuters, "highlighting the architectures, models, and investments powering a more intelligent and interconnected future."

CEOs from Adobe (ADBE), Chevron (CVX), Cisco Systems (CSCO), General Dynamics (GD), Palantir Technologies (PLTR), Pfizer (PFE) and Qualcomm (QCOM) as well as Saudi Aramco are attending the meeting too.

Senior executives from Google parent Alphabet (GOOGL), Blackstone Group (BX), Boeing (BA), Haliburton (HAL), International Business Machines (IBM), Lockheed Martin (LMT), Parsons Group (PSN), Salesforce (CRM), State Street (STT) and Super Micro Computer (SMCI) as well as Andreesen Horowitz and Saudi Group will also attend the event at the John F. Kennedy Center for the Performing Arts.

NVDA stock was up 1.8% with a little more than an hour remaining in Wednesday's regular trading session. TSLA was down 0.1%.

– David Dittman

NVDA stock rallies into the close

Nvidia (NVDA) traded up as much as 3.6% before noon, sank some but stabilized around midday, and rallied into the close to post a 2.9% gain ahead of its fiscal 2026 third-quarter earnings announcement and CEO Jensen Huang's press conference.

In October, Huang said the leader of the AI revolution has $500 billion in calendar 2025 and 2026 orders for its Blackwell graphics processing unit and its Rubin GPU as well as related AI infrastructure equipment. NVDA stock hit a new 52-week high the next day, October 29. It's down 12.1% from there.

Analysts will be looking for tangible follow-through from the "Godfather of AI," as Dan Ives of Wedbush has dubbed Huang. “This is how much business is on the books: Half a trillion dollars worth so far,” Huang said at Nvidia's GTC conference in Washington.

Nvidia typically posts its quarterly earnings press releases around 4:20 pm ET. And the CEO's press conference usually gets going right around 5 pm.

– David Dittman

Nvidia's FY26 Q3 earnings and guidance are in

Nvidia (NVDA), the leader of the AI revolution, reported fiscal 2026 third-quarter earnings of $1.30 per share (+60.5% year over year) on revenue of $57.01 billion (+62.5% YoY). Gross margin was 73.6% vs 75.0% a year ago.

Jensen Huang's outfit expects to report fiscal fourth-quarter revenue of $65 billion, "plus or minus 2%," and gross margin of 75%, "plus or minus 50 basis points."

"Data Center revenue for the third quarter was a record $51.2 billion, up 66% from a year ago and up 25% sequentially, driven by three platform shifts - accelerated computing, powerful AI models, and agentic applications," CFO Colette Kress said in her quarterly commentary. "Blackwell Ultra is now our leading architecture across all customer categories while our prior Blackwell architecture saw continued strong demand."

Wall Street forecast EPS of $1.23 (+51.9% YoY) on revenue of $54.59 billion (+55.6% YoY). The consensus hoped to see fourth-quarter ;revenue guidance of $59.60 billion.

NVDA stock was up nearly 4% in after-market trading following the release.

– David Dittman

Nvidia is "going in style"

“Nvidia (NVDA) bears the weight of the world," observes Hargreaves Lansdown analyst Matt Britzman in the first commentary I've seen since the widely watched earnings and guidance release, "but like Atlas, it’s standing firm under that towering mountain of expectations. Third quarter results delivered the goods and then some.

The analyst notes a 4% beat on the top and bottom lines along with "a side of more good news in the form of a monster $65 billion revenue guide for the fourth quarter."

"While AI valuations are dominating the news feeds," Britzman writes, "Nvidia is going about its business in style." He cites a massive backlog of orders as well as its underrated breadth, including a full data center business offering chips, software, networking and other AI infrastructure.

"Even if rivals can offer parts of the stack," Britzman concludes, "Nvidia’s fully integrated solution will be hard to beat.”

– David Dittman

CFO Kress: It's "early innings" for Nvidia

Nvidia (NVDA) continued to climb as CFO Collette Kress explained how the chipmaker's position in the scaling process ensures its continued growth and confirmed the leader of the AI revolution has "visibility to half a trillion dollars" in sales of its equipment through the end of calendar 2026.

"We're still in the early innings of our work," Kress said, adding that Nvidia will remain the "superior choice" for the $3 trillion to $4 trillion in annual AI infrastructure spend through the end of the decade.

"Demand continues to exceed our expectations," the CFO said.

NVDA was up more than 6% about 10 minutes into Kress's prepared remarks.

– David Dittman

More notes from the Nvidia CFO

In addition to confirming CEO Jensen Huang's $500 billion forward orders assertions, CFO Collette Kress underscored the importance of U.S. government support for the AI revolution.

The CFO noted intense competition from China.

Kress also emphasized that production for Nvidia's next-generation Rubin AI GPU is ramping on schedule.

In addition to a recently announced collaboration with Anthropic, Nvidia is now considering an opportunity to invest in OpenAI.

– David Dittman

Nvidia's US expansion will continue

Nvidia (NVDA) CFO Collette Kress said the company will continue to invest strategically following its recent deal with Anthropic and amid discussions with OpenAI, emphasizing the importance of cash flow discipline.

Kress also said that Nvidia's expansion of U.S.-based production capacity will continue.

The CFO cited physical AI as the driver of the next leg of growth for Nvidia, and she also underscored its commitment to building resiliency and redundancy in its global supply chain.

That includes building its presence in the U.S. over the next four years.

– David Dittman

About this AI bubble

"There's been a lot of talk about an AI bubble," Nvidia (NVDA) CEO Jensen Huang said at the top of his prepared remarks for the chipmaker's conference call.

"We see something very different."

Huang identified three massive platform shifts underway, noting that Nvidia is addressing all three transitions "for the first time since the advent of Moore's Law."

This change is revolutionary, Huang explains, and Nvidia excels at every level of it, including pre- and post-training as well as inference.

"AI has reached a tipping point."

– David Dittman

About that $500 billion

"Yes, that's correct, we are working into our $500 billion forecast," CFO Collette Kress said in response to the first question during today's Nvidia (NVDA) fiscal 2026 third-quarter conference call.

"The number will grow," Kress added, noting that Nvidia shipped $50 billion this quarter. "We will probably be taking more orders."

– David Dittman

Nvidia will be efficient

"The world doesn't have an excess of anything to squander," Nvidia (NVDA) CEO Jensen Huang said during a response to a question during the company's fiscal 2026 third-quarter conference call.

"Energy efficiency is going to be extraordinary as we continue to grow," he said. "Nvidia GPU computing is the best way to do so."

Huang says Nvidia's hardware will also help drive revenue growth over time because of its efficiency.

Hundreds of billions of capex will be cash-flow generative, he explained, because new applications are the fastest-growing in history.

"Once people see what's happening under the surface" and engage beyond hyperscalers they'll appreciate what's happening.

– David Dittman

Nvidia seeks "extraordinary" returns

"We've secured a really resilient supply chain, and we have the balance sheet" to support its clients, Nvidia (NVDA) CEO Jensen Huang said in response to a question about future investment plans.

Huang said Nvidia will continue to use cash flow to support investments to expand the ecosystem and catalyze growth for partners and developers.

"They're all driving consumption, with a huge step-up in quality from a year ago," Huang said. Rather than give up a share in his company, the CEO likes to get a share of those companies and potential "extraordinary" returns.

– David Dittman

Nvidia's platform is the singular platform

"We run them all," Nvidia (NVDA) CEO Jensen Huang said about the AI platforms proliferating across sectors, industries and geographies.

And, he adds, "We are expanding the reach of our ecosystem" with its investments, with an eye on exponential growth.

– David Dittman

It ain't easy, even for Nvidia… especially for Nvidia

"When you're growing at the rate and the scale we are, how can anything be easy?" wondered Nvidia (NVDA) CEO Jensen Huang near the end of the company's quarterly conference call.

"We created a whole new industry."

Huang explained that Nvidia continues to solve its tractable supply-chain problems, with a lot of partners and a lot of routes to market.

And its architecture will drive the most revenues on an efficient, per-Watt basis.

"All the things that I've been telling you over the years are becoming evident," he said.

– David Dittman

'All of that has worked out well for us'

CFO Collette Kress confirmed Nvidia (NVDA) will hold gross margins in the mid-70s, noting that the chipmaker is "making sure we are innovating with our engineering and our business teams to create more architecture for this marketplace."

"Spot on," CEO Jensen Huang said of Kress's response. "We forecast, we plan, we negotiate with our supply chain well in advance," The CEO explained. "Our supply chain has known for quite a long time our requirements."

Huang added that Nvidia's suppliers have been "working with us" during a recent demand surge. "All of that has worked out well for us," he said. "There just aren't that many teams that are this skilled at building these incredibly complex things."

The Nvidia CEO cited five things that separate his company from other AI infrastructure providers. First, Nvidia can accelerate every phase of the ongoing computing transition.

And i's excellent at every phase of AI: pre-training, post-training and inference, which is "really, really hard."

Also, it's the only architecture that runs every frontier AI model: open source, science, biology, robotics… "We run everything, for every major platform," Huan said.

"We're in every cloud," he added as a fourth factor. "We're literally everywhere, every computer. One architecture, and it works."

Finally, he said, "Our offtake is so diverse," emphasizing that the versatility of its architecture is supported by the size of its ecosystem.

NVDA stock was higher by 5% in after-market trading at the conclusion of Huang's remarks.

– David Dittman

Nvidia's latest earnings signal the start of AI's "second wave": enterprise adoption

Nvidia's earnings report on Wednesday delivered more than another headline beat. It was a signal of how the AI market is entering the second wave.

For the past two years, hyperscalers and model labs have driven the bulk of GPU demand. This was about building the infrastructure to power the explosive growth of generative AI. But this quarter's guidance suggests something different is happening: enterprises are finally moving from pilot experiments to real deployment.

As CFO Colette Kress put it, "enterprises broadly are leveraging AI to boost productivity, increase efficiency and reduce cost." She cited examples from RBC, Lowe's, Unilever, and Salesforce's engineering team using Cursor.

Nvidia is now seeing demand "across every industry," not just from cloud providers and model builders. Jensen Huang doubled down on the message, calling AI "a brand-new category" that is transforming existing business models and powering agentic applications in health care, legal, supply chain, marketing and more.

Importantly, Nvidia said it has visibility into $500 billion in Blackwell and Rubin revenue through 2026. This is an astonishing figure that reflects both hyperscaler builds and a rising wave of enterprise AI factories.

If the first wave of AI was about building foundational compute, the second wave is about companies operationalizing it. Nvidia's guidance — and its customer examples — suggest that wave has now begun.

- Tom Taulli

Nvidia (NVDA) is arguably the most important of the 30 Dow Jones stocks. But Goldman Sachs (GS) has the biggest dollar figure attached to its ticker, so the financial stock accounts for more in the price-weighted index.

And GS was down 1.8% to $790.76 today. UnitedHealth Group (UNH) was another heavyweight pulling on the Dow, with the health care stock shedding 3.2% to $321.80.

NVDA, meanwhile, was up 1.8% and rallied as much as 5.8% off its intraday low. The leader of the AI revolution will report fiscal 2026 third-quarter results after the closing bell on Wednesday, the highlight of next week's earnings calendar.

Walmart (WMT, -0.05%), both the biggest retailer and the biggest private employer in the world, will also report earnings next week.

As much as Nvidia's event will excite investors, traders and speculators – and give clues as to whether we're in an AI bubble – markets will value Walmart's perspective on the broader economy amid uncertainty exacerbated by the longest government shutdown in U.S. history.

"It appears that the current correction has largely played out," writes Louis Navellier of Navellier & Associates, "but we are still left with the weakest November so far since 2008."

Navellier concludes that if Nvidia "gives a good report next week and the Fed actually cuts in December, we still have a solid shot at a strong year-end and will look back to this week as another buying opportunity."

By Friday's closing bell, the tech-heavy Nasdaq Composite was up 0.1% at 22,900, having registered its biggest intraday reversal since April only to fade into the close. The Nasdaq was down 0.5% for the week.

The broad-based S&P 500 had given back 0.05% to 6,734. The widely followed index held on for a 0.07% gain from last Friday's close. The blue-chip Dow Jones Industrial Average was down 0.7% at 47,147, but Papa Dow was up 0.3% for the five days.

MRK is buying CDTX

Merck (MRK) was flat at $92.93. But one of the best dividend-paying health care stocks to buy boosted its future cash flow prospects with another acquisition to add to its existing portfolio as well as its drug-development pipeline.

Cidara Therapeutics (CDTX), the biotech stock Merck is buying, was up 105.4%. Cidara has an antiviral agent for the prevention of influenza infection in individuals at higher risk of flu complications in Phase 3 trials.

Merck will pay $221.50 per share for CDTX in a $9.2 billion deal that's expected to close in the first quarter of 2026. CDTX closed at $105.99 on Thursday.

“We intend to build on the Cidara team's remarkable progress and are confident that CD388 has the potential to be another important driver of growth through the next decade," Merck CEO Rob Davis said in a statement announcing the deal.

The acquisition further cushions MRK for the loss of patent exclusivity on its blockbuster cancer drug Keytruda in 2028, as it follows the October announcement of a $10 billion deal to acquire Verona Pharma and its chronic obstructive pulmonary disease drug.

Economic data is incoming… soon

Release of much of the data on the economic calendar remains subject to delays related to the recently resolved government shutdown. But we will see the minutes from the October Federal Open Market Committee meeting on Wednesday. And we will hear from a full set of Fed speakers throughout the week.

And the release of the final University of Michigan Surveys of Consumers results next Friday will offer "anecdotal data" on where we are in the economic cycle.

Hard data, including hiring numbers, is incoming too. As labor economist Guy Berger writes, "In some cases, collection was significantly disrupted, and there will be a permanent hole in the historical time series. In other cases, collection was either ongoing or can be 'made up' after the fact; it's a matter of compiling, processing and publishing that data."

The Bureau of Labor Statistics said it will release September jobs data on Thursday, November 20. But, according to Berger, the first batch of timely labor market data from the BLS will be the November employment situation report in December.

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Meanwhile, in addition to its leader providing another quarterly update on the AI revolution next week, a number of important retailers will offer a look at the health of the American consumer.

The usual sectors reflected a risk-off mood – communication services, technology and consumer discretionary stocks were three of the biggest losers. Utility stocks were also among the worst of the worst, but that price action mirrors renewed questions about whether we're in an AI bubble. Indeed, all that potential computing power requires a lot of electricity.

Nvidia (NVDA) was down 3.6%, as its turn next Wednesday on the earnings calendar marks a defining event for the rest of 2025. Tesla (TSLA) shed 6.6%.

Other Magnificent 7 stocks suffered similar fates: Alphabet (GOOGL) lost 2.8%, Amazon.com (AMZN) 2.7%, Microsoft (MSFT) 1.5% and Apple (AAPL) 0.2%. Meta Platforms (META), meanwhile, eked out a 0.1% gain after Wedbush added the Facebook and Instagram parent to its Best Ideas List.

And Constellation Energy Group (CEG) – one way to invest in a nuclear revolution driven by AI electric power needs – was down 5.2%.

But Cisco Systems (CSCO) bucked the trend, rising 4.6% and earning multiple analyst upgrades after reporting expectations-beating fiscal 2026 first-quarter results on Wednesday – all of it a function of the AI-driven demand cycle.

"The market is hungry for economic data now that the government is reopened," writes Louis Navellier of Navellier & Associates, who says non-government data shows "a fairly ugly" employment situation marked by low hiring and large layoffs. "While a weakening employment picture should push the Fed to cut in December," he says, "there may be inflation concerns that give them pause."

As Navellier notes, "A robust outlook by [Nvidia] CEO Jensen Huang is key to a strong year-end for the stock market."

At the closing bell, the blue chip Dow Jones Industrial Average was down 1.7% at 47,457, the broad-based S&P 500 had fallen 1.7% to 6,737, and the tech-heavy Nasdaq Composite was off 2.3% at 22,870.

DIS is a streaming stock

Walt Disney (DIS, -7.8%) was down big Thursday after management reported fiscal 2025 fourth-quarter results. Traffic at its U.S. amusement parks was down by 1%. The Dow Jones stock was also hampered by an ongoing dispute with Alphabet's YouTube unit, for which no end is in sight.

Disney posted earnings of $1.11 per share, down from $1.14 a year ago and above the $1.05 Wall Street consensus. Revenue slipped to $22.46 billion and came up short of analysts' expectations for $22.76 billion. Operating income for its entertainment segment was down 35% on declining TV advertising and box-office sales.

Disney did see profit growth for its streaming and experiences segments, as Disney+ added 3.8 million subscribers and overseas theme parks enjoyed strong foot traffic. And management reiterated guidance for double-digit EPS growth in fiscal 2026 and 2027.

Disney continues to negotiate a new streaming agreement with YouTube. Management said in a statement that it "cannot predict how long this service blackout will last or reasonably estimate the adverse impact on our results of operations."

About next week

"The market may be near all-time highs," writes independent analyst Jeff Macke, "but in terms of the economy, America is driving in the dark with the headlights off and the gas pedal to the floor."

As Macke explains, the gap on the economic calendar wasn't "magically fixed when the shutdown officially ended last night." Questions remain about when airlines will resume full operations, for example, and whether October economic reports will ever be released.

"Which is the bad news," the analyst concludes. "The good news is we're about to find out everything we need to know about the consumer, for better or worse."

Macke is referring to next week's earnings calendar, which, in addition to Nvidia, features Home Depot (HD, -0.8%), Lowe's (LOW, -1.4%), TJX (TJX, -0.5%), Target (TGT, -1.4%), Gap (GAP, -2.5%) and Walmart (WMT, -0.8%).

Walmart, of course, is both the biggest retailer and the biggest private employer in the world. We'll see what its numbers and its managers say before the opening bell next Thursday, the morning after Nvidia reports.

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If you ever come across a discussion about portfolio construction, you'll inevitably (and probably quickly) come across the term "core."

The exact definition will differ from one person to the next, but the general idea is that a portfolio's core is made up of long-term investments that are expected to generate reliable returns.

Anything you hold to accomplish goals outside of that core — dip into growth stocks for outperformance, try to generate above-average yield, for instance — are considered noncore or satellite holdings.

You'll typically build your core with mutual funds and/or exchange-traded funds (ETFs) because they provide exposure to basic strategies while also delivering built-in diversification. Satellite holdings are often made up of more specialized funds and individual stocks.

But there's no rule that says you can't try to use stocks to build part of your portfolio foundation. If you have more interest in individual companies, read on as I discuss a few "core stocks" every investor should own.

Data is as of November 11, 2025.

Core investments aren't just about 'what' but 'how much'

The core of my portfolio is going to differ from your core, which will differ from your neighbor's core … you get the point. Risk tolerance, investment horizon, our financial goals and other factors will all determine what our investment choices.

Regardless of our goals, we can use some of the same instruments to accomplish them — it's just a matter of how much we invest in those instruments.

Consider a pair of Vanguard target-date funds (TDFs):

• Vanguard Target Retirement 2070 Fund (VSVNX), which is designed to build wealth for people who plan to retire in roughly 40 years, allocates more than 90% of its assets to stocks, with the rest in bonds.
• Vanguard Target Retirement Income Fund (VTINX), appropriate for people who are already in retirement and want to protect their wealth, has just 30% of assets invested in equities, with the remaining majority invested in bonds.

Two products, two completely disparate goals. Yet … the vast majority of both TDFs' assets are concentrated in the same four funds, just in different amounts.

For instance, the 2070 fund allocates 54% of assets to the Vanguard Total Stock Market Index Fund Institutional Plus Shares (VSMPX), but the retirement income fund has just 18% of assets in VSMPX.

However, Vanguard Total Bond Market II Index Fund Investor Shares (VTBIX) makes up just 5% of the 2070 fund's assets, but at 35%, it's Target Retirement Income's largest holding.

That is to say: The following stocks can reasonably be called "core" positions. However, the percentage of capital you should dedicate to any single stock will vary widely based on your circumstances.

How I picked the best core stocks to own

I think the most common reader assumption going into this is that "core stocks" are going to be giant, durable blue chips with substantial dividend yields: the Coca-Colas and Procter & Gambles of the world.

But I went in a different direction.

The über core holding — an S&P 500 index fund — is considered a "large blend" fund, meaning it holds a blend of growth and value stocks. In other words, what you get on the whole is somewhere down the middle.

I'm taking the same approach with this list of equities, requiring them to be "large core" stocks as defined by Morningstar:

"Large core stocks are in the top 70% of the capitalization of the U.S. equity market and typically do not have pronounced tilts towards growth or value characteristics with respect to valuation ratios, dividend yields, and growth rates on earnings and sales, among other metrics."

In short, if you want stocks that tilt far in either direction, look elsewhere.

As far as the full screening criteria go, we're looking for core stocks …

• That are categorized as "large core" by Morningstar.
• That are members of the S&P 500. There's nothing wrong with international stocks, but I'm sticking to U.S. stocks for the purposes of building this list.
• With a market value of at least $50 billion. I'm going a little beyond "large core" with this requirement. Companies of this size tend to be among the best-resourced companies on the planet and often have significant cash holdings, which might help with long-term durability.
• With a total debt-to-equity ratio of 2 or less. A little debt leverage is healthy enough, but we want to avoid companies that are too reliant on IOUs to finance their operations. High debt service is a drag on resources, and high debt-to-equity ratios imply greater risk. Generally speaking, a debt-to-equity ratio of 2 or less is considered healthy.
• With estimated two-year average annual revenue and earnings growth of at least 5%: Analyst estimates are merely educated guesses, and even those guesses are limited to the relative short-term. Still, estimates for at least modest top- and bottom-line growth provide us with a baseline of operational quality.
• With a consensus Buy rating: All the stocks must have an average broker recommendation of 2.5 or less within S&P Global Market Intelligence's ratings scale. S&P Global Market Intelligence converts analysts ratings into a numerical scale. Anything with a score of 2.5 or less is considered a Buy. While analysts' calls are typically more short-term in nature, only really applying to the next year or two, they can help us identify quality and reasonable valuations.

Visa

• Sector: Financial services
• Market value: $654.1 billion
• Dividend yield: 0.8%
• Consensus rating: 1.63 (Buy)

Visa (V) is the king of plastic, boasting nearly 5 billion Visa credit cards and debit cards across the globe that are responsible for nearly $16 trillion worth of transactions annually. It's also something of a hybrid — while it's categorized as a financial firm, it's technically not a bank. Instead, it's a payments processor that empowers banks' clients to spend.

Visa's market-leading position speaks to its reliability, but what about growth? Believe it or not, nearly two-thirds of the world's retail transactions are still performed via cash or check — providing Visa with plenty more market to gobble up over time. Over the next two years, the pros expect Visa to improve its sales and profits by a respective 11% and 13% annually on average.

"Visa remains well-positioned to gain global market share from the multiyear runway to convert paper-based payments to card, enabling high-single payment volume growth over the next three years, at least," say Oppenheimer analysts, who rate the Dow Jones stock at Outperform.

The underlying financials provide plenty to like. Debt-to-equity of 0.68 indicates that Visa isn't remotely overleveraged but isn't afraid to use at least a little debt to grow the business. Despite making plenty of acquisitions — in the past few years, it has bought companies including Mexican payments processor Prosa, open banking platform Tink, and AI payments protection tech firm Featurespace — it has $19 billion in cash and short-term investments set aside for a rainy day.

But Visa does share some of its profits: While the sub-1% yield isn't much to marvel at, it's a reliable dividend growth stock, currently boasting a 16-year streak of consecutive payout hikes.

S&P Global

• Sector: Financial services
• Market value: $148 billion
• Dividend yield: 0.8%
• Consensus rating: 1.33 (Strong Buy)

I've already mentioned S&P Global's (SPGI) arguably most famous product, the S&P 500. That's just one of the literal millions of indexes produced by its S&P Dow Jones Indices arm.

But S&P Global is a diversified financial company responsible for so much more, including financial markets and asset data, commodity and energy information and credit ratings, to name a few.

In other words: You're investing in the financial sector, yes, but you're not investing in a one-dimensional bank — instead, you're getting exposure to capital markets, business solutions, even AI. That breadth somewhat blunts the cyclical nature of many of its businesses while also positioning the company for growth.

Wall Street expects average annual improvements of 7% and 11%, respectively, on the top and bottom lines. Not a breakneck pace, but respectable.

"Bigger picture, we continue to view S&P Global as unparalleled in the breadth and depth of its data assets, aided by the secular tailwinds supporting data consumption and enhanced by the company's AI capabilities," says William Blair analyst Andrew Nicholas, who rates the financial stock at Outperform.

Debt-to-equity is a very low 0.36 at the moment, and it has nearly $2 billion in cash and short-term investments. SPGI is a dividend grower, too — its 52-year streak of distribution improvements puts it among the ranks of the Dividend Kings.

Boston Scientific

• Sector: Health care
• Market value: $152.0 billion
• Dividend yield: N/A
• Consensus rating: 1.32 (Strong Buy)

Health care has been among the market's most versatile sectors over the decades, simultaneously providing both defensive and growth characteristics while occasionally offering decent income, too.

In the case of Boston Scientific (BSX), two out of three ain't bad.

Boston Scientific is a medical device maker with a wide range of products under a pair of segments: MedSurg and Cardiovascular.

The former includes products such as biliary stent systems, digital catheters, sheaths, balloons, laser systems, and more, while the latter includes implantable cardiac devices, pacemakers, ICD leads, even patient management systems.

In short: These are products that people will continue to need to enjoy a high quality of life (and in some cases, to simply live), but many of these products are new technologies and treatments driving continued growth.

"Boston Scientific continues to ride the momentum of several key product and portfolio launches, most notably its pulsed-field ablation (PFA) solutions including Farapulse and Farawave," says Citi analyst Joanne Wuensch (Buy).

"With a steady cadence of new technology and associated mix benefit on margin, we believe that BSX is positioned to deliver double-digit revenue growth leveraged to double-digit EPS growth faster than sales."

Not that sales are anything to sneeze at. Two-year average annual growth estimates for revenues and earnings are 15% and 17%, respectively. In fact, that top-line estimate is the best among these five core stocks. Meanwhile, debt-to-equity is a perfectly fine 0.51, and cash and short-term investments sit at $500 million right now.

But you won't get income out of BSX, which currently doesn't pay a dividend.

Amazon

• Sector: Consumer discretionary
• Market value: $2.66 trillion
• Dividend yield: N/A
• Consensus rating: 1.30 (Strong Buy)

Amazon (AMZN) is another hybrid — it's considered a consumer discretionary stock for its legacy e-commerce business, but it's undoubtedly a technology play, given its market-leading Amazon Web Services (AWS) cloud provider arm. While we're at it, let's throw in communication services because of its Amazon Prime TV and Amazon Music offerings.

While it has had some struggles on this front, Amazon continues to ply its trade as a consumer staples provider. In August, the company announced that it had launched same-day perishable grocery delivery in more than a thousand cities (expecting to hit 2,300 cities by the end of 2025).

In October, it rolled out its private-label food brand, Amazon Grocery, offering more than 1,000 food items spanning pantry staples, baking essentials, produce, dairy, even meat and seafood, with "most products priced under $5."

AWS is still the straw that stirs the drink.

"AWS remains the current market leader, which we expect to remain the case for the foreseeable future, even if the gap between peers is expected to narrow," says HSBC analyst Paul Rossington, who rates the stock at Buy.

"This is underpinned by continued investment in the AWS offering and new contract wins across a broad range of existing and new clients. This makes for a lower risk growth profile vs peers who are more heavily reliant on a smaller number of key contracts."

Amazon leans "growthy"; two-year average annual estimates for revenue and earnings are a high 10.6% and 17.3%, respectively.

AMZN continues to throw money back into the business, so there's currently no dividend of which to speak, but the company is clearly prepared for a rainy day, with $93 billion sitting around in cash and short-term investments. Leverage is no issue, with debt-to-equity sitting around 0.41.

Microsoft

• Sector: Technology
• Market value: $3.78 trillion
• Dividend yield: 0.7%
• Consensus rating: 1.21 (Strong Buy)

Microsoft (MSFT) is one of the largest companies on Earth and a pillar of the technology sector. Its legacy productivity business includes Microsoft 365 — the famous suite of tools including Word, Excel and PowerPoint — but also Power BI, Microsoft Teams, Security and Compliance, and the AI assistant Copilot.

Like Amazon, it too boasts a powerful cloud product (Azure), as well as server products, enterprise and partner services, personal computing (including Surface laptops) and the Xbox gaming division.

The company's growth at the moment is in part tied to generative AI. Says Morgan Stanley analyst Keith Weiss (Overweight):

"Microsoft, in particular, remains in the leadership position, driven in part by: 1) strong alignment to key secular themes and CIO priorities, 2) deep integrations across the software ecosystem, 3) vast scope of products to monetize Generative AI across its broad portfolio and installed base, and 4) significant and increasing AI infrastructure investments.

"All of this translates to Microsoft expanding its leadership position as the #1 share gainer of IT wallets on a 1-year and 3-year view as workloads shift to the cloud and its leadership position allows it to capture the largest incremental share of GenAI spend by a wide margin."

The bottom line on Microsoft, according to Weiss, is that it "remains the clearest beneficiary of GenAI spend."

That AI fervor is fueling average annual revenue and earnings growth estimates of 16% and 15%, respectively, over the next two years. But Microsoft's breadth of business provides some cushion and peace of mind should fears that we're in an AI bubble come to pass (and should that bubble pop). A $95 billion war chest also acts as a sizable backstop.

In the meantime, debt isn't anything to worry about, with MSFT sporting a low debt-to-equity of 0.33. While Microsoft doesn't provide much in the way of headline yield, it has built itself an admirable streak of dividend growth, currently sitting at 20 years.

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The Dow is now up more than 6% over the trailing month. UnitedHealth Group (UNH, +3.6%) led the 30 Dow Jones stocks higher today after Chief Financial Officer Wayne DeVeydt reaffirmed management's expectation that performance will improve in 2026 before new strategic initiatives begin to pay off in 2027.

Software maker Cisco Systems (CSCO, +3.1%) was up ahead of its post-closing-bell appearance on the earnings calendar. Nvidia (NVDA, +0.3%), meanwhile, surged late to post a gain a day after SoftBank sold its entire $5.8 billion stake in the bellwether of the artificial intelligence (AI) revolution so CEO Masayoshi Son can concentrate on a $30 billion OpenAI bet.

Among other Magnificent 7 stocks in the world's second-oldest equity index, Microsoft (MSFT, +0.5%) also posted a gain. Apple (AAPL, -0.7%) was down modestly, and Amazon.com (AMZN, -2.0%) finished at the bottom of the index.

At the closing bell, the blue chip Dow Jones Industrial Average was up 0.7% at 48,254, a new all-time closing high and the first time Papa Dow has finished a trading session above 48,000. The broad-based S&P 500 had inched up 0.06% to 6,850, but the tech-heavy Nasdaq Composite was down 0.3% at 23,406.

AMD has EPS power

Advanced Micro Devices (AMD, +9.0%) did its part on behalf of semiconductor stocks after Truist analyst William Stein reiterated his Buy rating and his $279 12-month target price for the "emerging DC/AI 'trusted partner'."

According to Stein, AMD stock remains cheap, noting the company is growing earnings per share at a compound annual rate of approximately 45% through 2030 but trades at about 10 times 2030 "EPS power."

AMD management said at its investor day presentation on Tuesday that it also expects 35% total sales growth and expanding margins, citing an 80% growth rate for server accelerator sales.

OKLO is still going nuclear

Oklo (OKLO, +6.7%) continues to demonstrate why it's one of the best ways to invest in the nuclear revolution. And Wedbush analyst Dan Ives reiterated his Outperform rating and his $150 12-month target price on the stock.

"Oklo continues to see regulatory acceleration for its projects," Ives writes, "with the DOE authorizing an approval to construct and operate a nuclear facility creating a modern pathway to get new nuclear plants built quickly."

As Ives explains, "Oklo is setting the stage for nuclear energy to become widely adopted over the next decade as the AI Revolution data center buildout is driving significant demand for new energy to power these initiatives."

Indeed, AI-driven computing power is expected to grow 10 times by 2030.

Shutdown math

The House of Representatives is poised to approve legislation to end the longest-ever government shutdown in a vote expected to happen around 7:15 pm Eastern Standard Time today. The compromise bill, which provides funding to keep the government operating through January 30, would then move on to President Donald Trump's desk for signature.

Despite the added uncertainty, notes LPL Financial Chief Technical Strategist Adam Turnquist, stocks have risen. "Since the shutdown began on October 1," Turnquist writes, "the S&P 500 has gained 2%, with a peak-to-trough decline of only 3%." Both of those performance figures are better than average for government shutdown periods.

Turnquist says there could be more upside from here: "Historically, removing the uncertainty from a government shutdown tends to support equities." After 20 shutdowns since 1976, the S&P 500 has generated average one- and three-month returns of 1.2% and 2.9% vs 0.8% and 2.4% during all periods over the same time frame.

Landsberg Bennett Private Wealth Management Chief Investment Officer Michael Landsberg explains the stock market's moves from a fundamental perspective: "There is a simple reason that stocks are up so much, and that's because S&P earnings have handily beaten street estimates time after time this year, forcing much of Wall Street to play catch up."

Landsberg is cautious, though: "The market had been flying blind with no data, and now as the fog lifts, we will see if market positioning has been correct and it is still clear sailing or if there is a big repricing necessary."

With an abundance of incoming data filling up the economic calendar in the near future, investors, traders and speculators will re-focus on inflation, jobs and the next Fed meeting.

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Nvidia (NVDA) was one of the more notable decliners, dropping 3% on news SoftBank sold its remaining stake in the artificial intelligence (AI) chipmaker for roughly $5.8 billion.

Elsewhere, CoreWeave (CRWV) plunged 16.3% after the AI infrastructure firm, which rents out NVDA chips, reported earnings. While the company disclosed higher-than-expected third-quarter revenue of $1.36 billion – more than doubling on a year-over-year basis – it gave weak full-year revenue guidance.

"There was a problem at one data center that's impacting us," said CoreWeave CEO Michael Intrator on the earnings call, though he added that it "should be taken care of within Q1 of next year."

"This near-term supply-side issue masks significant underlying momentum," says Stifel analyst Ruben Roy. "The company's backlog nearly doubled to roughly $55.6 billion, fueled by major contracts with OpenAI and Meta, while its total contracted power pipeline expanded to about 2.9 gigawatts."

While Roy is "more optimistic on the CRWV story," he remains Hold-rated on the AI stock "until supply-side issues are overcome."

Buy the dip on Nike, says BofA

On the positive side of the ledger was Nike (NKE), with the Dow Jones stock climbing 3.9% after a bullish analyst note.

Shares have been falling since the athletic apparel and footwear maker reported impressive fiscal first-quarter results in late September, but BofA Securities analyst Lorraine Hutchinson says the pullback creates "a particularly attractive buying opportunity."

Hutchinson sees "a path toward continued improvement in sales and margins as the innovation pipeline starts to scale." She believes the company's Sports Offense strategy, which focuses on sports-based teams, enables "deeper category expertise," and its Innovation Engine allows for transformation across its entire product portfolio.

The analyst has a Buy rating on the blue chip stock and an $84 price target, representing implied upside of 33% to current levels.

At $63 per share, Nike is one of the least impactful stocks on the price-weighted Dow. However, strong gains for high-priced Amgen (AMGN, +4.6%) and McDonald's (MCD, +2.6%) provided ample tailwinds for the 30-stock index.

Indeed, the blue chip Dow Jones Industrial Average finished the day up 1.2% at 47,927 – a new record closing high – and the broader S&P 500 was 0.2% higher at 6,846. The tech-heavy Nasdaq Composite was down 0.3% at 23,468.

Job growth declines, according to ADP

In economic news, data from ADP showed that private employers shed more than 11,000 jobs, on average, each week in the four weeks ending October 25. While the numbers are preliminary and could change, they suggest "that the labor market struggled to produce jobs consistently during the second half of the month," says Nela Richardson, Ph.D., chief economist at ADP.

Wall Street has put more stock in private data releases recently as the record-long government shutdown has delayed several key economic reports. But the data floodgates could soon be opened with the government expected to resume operations this week, pending the passage of a short-term funding bill in the House of Representatives.

José Torres, senior economist at Interactive Brokers, expects the September jobs report – initially scheduled for release in early October – could be released as early as next week. He's anticipating soft results, which could lift expectations for a December rate cut.

According to CME Group's FedWatch, there's a 67% chance the Fed will issue its third straight quarter-point rate cut at its next meeting – down from 92% one month ago after Chair Powell said it wasn't a sure thing.

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"While the upside of concentrated positions can be enticing, many of the most successful investors believe the risk is too high," says Erin Scannell, a private wealth adviser at Ameriprise Financial.

This is where one of the most powerful, yet overlooked, investing strategies comes into play: the 5% Diversification Rule.

It's a simple principle that says the highest probability of long-term success in investing isn't from chasing the next hot stock; it's from building a robust, resilient portfolio that can weather any storm and still capture growth.

What is the 5% Diversification Rule?

The 5% Diversification Rule states that no single position should make up more than 5% of your portfolio's total value.

So, if your portfolio is $100,000, no investment should be worth more than $5,000. The reasoning behind this rule is that it prevents any single holding from tanking your entire portfolio.

To illustrate this, Scannell gives an example of two $1 million portfolios. Portfolio A is concentrated with 20% allocated to each of five individual investments. Portfolio B is broadly diversified across the entire stock market.

"Assuming a bull market year where the broad market rises by 15%, Portfolio B could grow to approximately $1.15 million," Scannell says. "In contrast, if four of the holdings in Portfolio A outperform and rise by 20%, but one investment loses all its value, the portfolio's overall value could decline to around $960,000."

If your portfolio were even more concentrated in that one bad egg, the losses could be even steeper.

How to use the 5% Diversification Rule

To apply the 5% Diversification Rule in your own portfolio, simply review your holdings and trim any position that accounts for more than 5% of your total portfolio value.

You can do this by selling enough of your outsize investments to bring their weighting back to 5% of your portfolio, and use the proceeds to buy enough shares of any underweight positions to bring them closer to the 5% mark.

It should be noted that no two investors are exactly alike. Some may find even a 5% allocation too unnerving, in which case a 3% or even 2% rule might be more appropriate, says Andrew Crowell, financial adviser and vice chairman of wealth management at D.A. Davidson.

He also points out that many exchange-traded funds (ETFs) and mutual funds may not be equal-weighted, so even if the ETF itself is a 5% weighting in a portfolio, it may be carrying more risk than you realize.

Caveats to the 5% Diversification Rule

While the 5% Diversification Rule can be applied to all asset classes and investment types —from stocks and bonds to funds —it's most important when applied to equities. Some would even argue the rule is unnecessary for fund investors.

"A position in an ETF like the SPDR S&P 500 ETF (SPY) and the Invesco QQQ Trust (QQQ), or even thematic vehicles such as the Health Care Select Sector SPDR Fund (XLV) or the VanEck Semiconductor ETF (SMH), represents diversified exposure across dozens or hundreds of underlying holdings," says Elliot Dornbusch, CEO and chief investment officer at CV Advisors. "Labeling such allocations as 'single positions' mischaracterizes their risk contribution."

A 10% allocation to SPY carries far less idiosyncratic risk than a 3% stake in a single small-cap stock, he says. Similarly, a 15% allocation to U.S. Treasuries would add stability, not volatility.

When not to use the 5% Diversification Rule

For many investors, a 5% diversification threshold is a smart way to ensure their portfolio is adequately diversified and limits volatility. However, there are times when you may choose to deviate.

"Successful investing often rewards conviction and patience," Dornbusch says. "Diversification protects capital; concentration builds it."

Many investments will grow into outsize positions over time, he says. Forcing a sale simply because your position has breached the 5% threshold would interrupt its compounding and growth potential. For this reason, he argues that "a disciplined review process should govern size, not a static rule."

Scannell also deviates from the 5% rule at times, but only after "significant research into the fundamental health of the business." And even then, he wouldn't recommend going above a 10% allocation.

The flexible 5% Diversification Rule

The most important takeaway for investors is that diversification is important, and using a guideline such as the 5% Diversification Rule can help keep you on track in meeting your financial goals. However, you don't have to be rigid in your adherence to it.

Crowell recommends applying a tolerance band of 2.5% to 3% to the rule. "Rather than trimming 1% just because an investment has appreciated to 6% within the portfolio, waiting until it is 7.5% or even 8% to 'true-up' to the 5% target might make more sense," he says. Additionally, this more flexible system may result in lower trading costs from less frequent rebalancing.

You could also apply different band sizes to various asset classes. For example, "a 10% to 15% allocation to Treasuries, a 7% position in a high-conviction equity, or even a 20% exposure to a diversified ETF can all be appropriate — provided they fit within the portfolio's overall risk architecture," Dornbusch says.

If you do decide to place more concentrated bets, the key is control. Maintain liquidity buffers, monitor correlations and actively manage downside risk while allowing for the upside to compound, Dornbusch advises.

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At the close, the blue-chip Dow Jones Industrial Average was up 0.8% at 47,368, the broader S&P 500 was 1.5% higher at 6,832, and the tech-heavy Nasdaq Composite had gained 2.3% to 23,527.

The Senate's short-term funding bill, which still needs to pass the upper chamber with a final vote before it heads to the House of Representatives, does not extend Affordable Care Act (ACA) tax credits, which are set to expire at the end of this year.

It does reverse some of the mass federal layoffs the Trump administration enacted during the shutdown and guarantees pay for furloughed government workers.

"Global markets kicked off the week on a positive note, buoyed by signs that the U.S. government shutdown may soon be resolved," says Matt Britzman, senior equity analyst at Hargreaves Lansdown. "Investors tend to prefer stability and removing this uncertainty allows focus to shift back to earnings season, which is where the real story lies."

Indeed, roughly 61% of the 450 or so S&P 500 companies that have reported earnings so far have beat both the top and bottom lines, says BofA Securities strategist Savita Subramanian. This is better than the long-term trend of 41%, Subramanian adds, and in line with second-quarter earnings season.

Next up on the earnings calendar is Dow Jones stock Cisco Systems (CSCO, +1.4%), which will report after Wednesday's close.

UBS Global Research analyst David Vogt recently upgraded CSCO to Buy from Neutral (Hold) and raised his price target to $88 from $74, representing implied upside of 22% to current levels.

"We upgrade Cisco … based on a multi-year growth cycle driven by AI infrastructure demand, a large-scale Campus refresh cycle, and momentum in Security," says Vogt.

Nvidia stock rallies in risk-on session

But the main earning event occurs after the close next Wednesday, November 19, when artificial intelligence (AI) bellwether Nvidia (NVDA, +5.8%) discloses its third-quarter results.

Nvidia, along with several mega-cap tech stocks such as Broadcom (AVGO, +2.6%) and Advanced Micro Devices (AMD, +4.5%), rallied in Monday's risk-on session.

And UBS Global Research analyst Timothy Arcuri thinks there's more room to run. The analyst has a Buy rating and $235 price target on the blue chip stock ahead of earnings, representing implied upside of nearly 20% to current levels.

Arcuri expects Nvidia to report Q3 revenue of $56 billion, more than the $54 billion the company has guided for. He also sees "a number of favorable tailwinds" to fourth-quarter guidance, and expects the company to target revenue of $63 billion to $64 billion.

Buffett is "going quiet"

Berkshire Hathaway (BRK.B) today released Warren Buffett's annual Thanksgiving letter (PDF) to shareholders. The Oracle of Omaha, who will retire as CEO of Berkshire at the end of this year, said he is "going quiet." Well, "sort of."

Buffett noted that he will no longer be writing Berkshire's annual report; those duties will now fall to incoming CEO Greg Abel. However, he will continue with his annual Thanksgiving letter.

In this year's communication, Buffett reminisced about his life and said that he still spends five days a week at the office. "Occasionally, I get a useful idea or am approached with an offer we might not otherwise have received," he writes. "Because of Berkshire's size and because of market levels, ideas are few – but not zero."

Buffett also said that shareholders shouldn't fret about declines in the stock price. Shares are down about 8% since May's retirement announcement, though they remain a long-time market beater. And, as Buffett notes, "America will come back and so will Berkshire shares."

He concluded by sending out Thanksgiving wishes to all, "even the jerks," adding that "it's never too late to change."

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The October jobs report was slated to be released today, but due to the government shutdown, the data are delayed for a second month in a row. Based on the private data we've seen, Comerica Chief Economist Bill Adams believes "employment likely fell in October as weak private hiring failed to offset a drop in federal employment as workers who took buyout packages early this year fell off of payrolls."

The economic calendar did feature the University of Michigan's Consumer Sentiment Index, which showed just how big of a hit sentiment is taking due to the shutdown. Indeed, the index plunged to 50.3 in November from October's 53.6 – its lowest level since June 2022 and second-lowest reading since at least 1978.

"With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy," says Surveys of Consumers Director Joanne Hsu.

Consumers' expectations of current personal finances dropped 11%, while those for year-ahead business conditions fell 11%. Declines were seen across most demographics, though sentiment among consumers with the largest amount of stock holdings was up 11% as the equities market traded near record highs.

"The record-long government shutdown is the primary factor worsening household confidence, which is limiting personal pocketbooks at a time when price pressures and softening labor demand are weighing on consumption prospects," says José Torres, senior economist at Interactive Brokers.

Torres notes that investors are responding by "scooping up safe-haven assets," including gold (+0.4% at $3,999.40 per ounce), and reducing exposure to riskier assets.

Indeed, the tech-heavy Nasdaq Composite fell 0.2% to 23,004. The broader S&P 500 managed a 0.1% gain to end at 6,728 and the blue-chip Dow Jones Industrial Average added 0.2% to 46,987.

All three indexes finished well off their session lows after a CNBC report detailed Democrats' new plan to pass a short-term funding bill in exchange for a one-year extension of Affordable Care Act (ACA) tax credits.

For the week, the Dow dropped 1.4%, the S&P 500 lost 1.8%, and the Nasdaq slumped 3.2%.

Block stock sinks after earnings miss

In single-stock news, Block (XYZ) tumbled 7.7% after the payments processor reported lower-than-expected third-quarter earnings and revenue.

Still, Argus Research analyst Stephen Biggar reiterated a Buy rating on the financial stock after Block said its gross payment volume improved from Q2 to Q3 and it raised its full-year gross profit growth forecast.

"Over the long term, we believe that Block is taking advantage of the changing payments landscape, including the greater use of mobile devices for payments and the technological integration of different payment channels," Biggar says.

Tesla tumbles after shareholders approve Musk's massive pay package

Tesla (TSLA) was another notable decliner, falling 3.7% after the company on Thursday said that more than three-quarters of its shareholders approved a new package for CEO Elon Musk that could be worth up to $1 trillion.

Wedbush analyst Daniel Ives, who has an Outperform (Buy) rating and Street-high $600 price target on the Magnificent 7 stock, says the vote allows Tesla to keep its "biggest asset, Musk, as its leader for the foreseeable future."

Ives believes Tesla could hit a $2 trillion market cap – one of the major milestones in Musk's new pay package – by early 2026 and $3 trillion by the end of next year "as full-scale volume production begins of the autonomous and robotics roadmap."

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The same approach applies to portfolios. Earlier this year, many U.S. investors learned that their mix was off after foreign stocks significantly outpaced U.S. shares … just as the S&P 500 stumbled badly. It quickly became clear that many investors were underexposed to foreign markets and overexposed to the United States.

In a June survey, Schwab Asset Management found that moderate-risk individual investors held just 10% of their portfolios in foreign shares; U.S. stocks, by contrast, made up 61%. In short, investor portfolios weren't diversified.

It was a comeuppance long in the making. For nearly 15 years, U.S. stocks have been the place to be. Why bother to diversify — break up your investments across a variety of stocks, bonds and other assets — when the S&P 500 is beating everything?

"It can be easy to forget the benefits of diversification in a very sharp upward-moving market," says Andrew Altfest, a certified financial planner with Altfest Personal Wealth Management in New York City.

But over time, you'll find that a mix of investments can smooth your returns, strengthen your resolve as an investor, dampen risk in your portfolio and keep you exposed to whichever corner of the market is working at the moment — no crystal ball necessary.

In a truly diversified portfolio, some investments will be in favor while others are on the outs. "You will never own only winners, but you won't get stuck with only the laggards, either," says Jeff DeMaso, editor of The Independent Vanguard Adviser.

A smoother ride

A diversified portfolio can deliver less-volatile returns, which may help you stay the course during turbulent times — and arguably, that's half the battle in achieving your investment goals.

Moderate-allocation funds, also called balanced funds because they stabilize a 60% allocation of assets to stocks with a 40% stake in bonds, have been about one-third less volatile than an all-stock portfolio over the past 10 years.

"When the stock market sells off, investors tend to sell and move into cash. The problem there is, they've divested. So, we always say, stay invested and diversify," says Alessio de Longis, senior portfolio manager and head of asset allocation at Invesco Solutions.

Indeed, diversification isn't a strategy you turn on during rough markets and switch off in roaring bull markets. "It's something you should always have in your portfolio,” says Kristy Akullian, head of iShares investment strategy for the Americas at BlackRock.

Diversification can help ward against risk, too, of which there's no shortage these days. U.S. stocks are trading at high valuations. The economy looks to be slowing. Inflation remains sticky. And uncertainty lingers about the impact of new government policies and geopolitical risks. All of these challenges are chipping away at investor confidence.

Some advisers zero in on risks as a guiding principle for diversifying their clients' portfolios. Worried about a decline in the dollar? Add non-dollar assets — foreign stocks or bonds — to your portfolio. Concerned about an inflationary shock? Fold in a stake in commodities or real estate. A recession? Insert a slug of high-quality bonds or beef up on cash.

"Since I think all of these are potential sources of risk to the stock market, I put a lot of these diversified eggs into my clients' portfolio baskets," says Paul Winter, a certified financial planner at Five Seasons Financial Planning in Salt Lake City, Utah.

Another reason to diversify is that it's impossible to predict which investment will outperform in any given year — so it pays to own a mix of several. "The point of diversification is that you don't know what is going to happen," says Thomas Martin, of Globalt Investments, an Atlanta-based investment firm, but you can be prepared just the same.

The fact is, market leadership can shift dramatically from year to year. Though large-company stocks have topped the charts in many years recently, the winning asset class in any given year is often anybody's guess.

According to the Callan Periodic Table of Investment Returns, a colorful depiction of how asset returns can vary from year to year, small-cap stocks fared best in 2020. In 2018 and 2022, cash prevailed. And emerging markets stocks were the best-performing asset class in 2017; the next calendar year, they were the worst.

While there are rules of thumb to follow, a well-diversified portfolio is "very much an art, not a science," says Winter. For example, you want to own multiple kinds of assets, but that does not mean you own everything in equal measure. "Depending on your overall allocation, you might not need to go super-deep on every category," says Roger Young, a CFP at T. Rowe Price.

The good news: This is a great time to diversify. If, like many American investors, your portfolio is heavily weighted toward U.S. stocks, it's not too late to lighten the load and find opportunities in less-expensive pockets of the market.

"U.S. stocks are near their all-time highs, and that's a lot better time to diversify than, say, back in March 2009," the market's nadir during the Global Financial Crisis, says Winter.

Stocks, bonds and alternative assets are the main elements of a diversified portfolio. But you'll want to make sure you're diversified within those types of investments, too.

In this article, we'll walk you through the ingredients of a good diversification plan, with some timely moves to make now and tips on how to maintain your portfolio. Prices, returns and other data are as of August 31.

Stocks

Stocks can be risky but also rewarding. Over the past 10 years, the S&P 500, which represents more than 80% of the total U.S. stock market, has returned a whopping 15% a year.

But the stock market doesn't move as a monolith — and within your stock holdings, you should assemble a broad mix, considering a number of factors.

Company size

The market can favor companies of a particular size — sometimes for years — depending on economic factors, industry innovations or even just market sentiment.

Over the past decade, thanks to globalization, large companies have ruled, ranking as the top-performing asset class in five of the past 10 years and among the top three performers in eight of the past 10, according to the Callan table.

"The big just got bigger," says Jake Schurmeier, a portfolio manager at Harbor Capital. That makes exchange-traded funds (ETFs) that invest in small and midsize companies, such as the iShares Core S&P Mid-Cap (IJH) and the iShares Core S&P Small-Cap (IJR) — members of the Kip ETF 20, our favorite exchange-traded funds — good diversifiers for the large-cap S&P 500.

Some strategists see an opportunity in midsize-company stocks, especially these days. The middle tier of the U.S. stock market "is uniquely positioned to capitalize on growing demand for American-made goods and infrastructure solutions in a reshoring and energy-independent economic landscape," says Dina Ting, head of global index portfolio management at Franklin Templeton.

Plus, on a price-to-earnings basis, mid-cap stocks now trade at an atypical discount to large caps.

Concentration

Large-company stocks' recent run has included the meteoric rise of tech stocks in general and anything related to artificial intelligence (AI) in particular.

A group that includes Nvidia (NVDA), Microsoft (MSFT) and Apple (AAPL), known as the Magnificent Seven, accounts for one-third of the value of the S&P 500 Index. Thus, what might look like a diversified collection of U.S. stocks is in reality an outsize bet on a dazzling few.

A simple way to mitigate such overconcentration is the Invesco S&P 500 Equal Weight ETF (RSP). In this fund, every company gets an equal share of assets. So, while Nvidia accounts for 8% of the traditional market-cap-weighted index, it makes up just 0.24% of the Equal Weight fund.

Investment style

Professional investors typically hew to a certain methodology. These approaches break down into two broad styles: value and growth. Value managers favor stocks that trade at a discount to various metrics; growth managers prefer companies that are growing faster than average.

The two styles wax and wane at different times, and the cycles tend to last for long stretches. Value won the period from the start of 2000 to 2009. But since then, growth has dominated, though it's worth noting that value stocks held up better during the most recent bear market from January to October 2022.

Because it's difficult to predict when one style is going to outperform the other, even in a bear market, it's important to maintain a toehold in both growth and value strategies.

Chances are, however, that you've got plenty of exposure to growth stocks these days. Consider adding a value-driven fund such as Dodge & Cox Stock (DODGX), a mutual fund that has outpaced the S&P 500 over the past five years, or Capital Group Dividend Value (CGDV), an ETF that has beaten the S&P 500 over the past three years.

Both are actively managed, but index-fund lovers could look at the Vanguard S&P 500 Value ETF (VOOV). The ETF holds its own among a peer group of value-oriented large-company stock funds.

Geography

You need both U.S. and non-U.S. stocks in your portfolio, although many years of U.S. out-performance made that idea unpalatable. That changed in 2025: After lagging the U.S. stock market for nine of the past 11 calendar years, the MSCI EAFE Index, a popular international-stock benchmark, is up nearly 23% so far this year, beating the S&P 500 by more than 12 percentage points.

Most strategists agree that U.S. investors need to boost their exposure to international stocks. The timing is good. A weakening dollar tends to magnify gains in foreign shares (because they translate into more dollars stateside). And foreign stocks are still cheap relative to U.S. stocks on a price-to-earnings basis, even after a strong run so far this year.

Foreign stocks include those in both developed and emerging markets. You can zoom in on a region — Europe, Asia, Latin America, say — or a single country, such as Japan, India, Germany or China. And of course, at every level, you can focus on company size or value or growth approaches.

Start with the Vanguard Total International Stock ETF (VXUS). It's an inexpensive way to get instant exposure to nearly every foreign stock in developed and emerging markets. Morningstar analyst Zachary Evens calls it "wall-to-wall foreign-stock exposure." The fund has gained 23% since the start of the year.

Add an emerging-markets index fund. The iShares Core MSCI Emerging Markets ETF (IEMG) tracks an index of 20-odd developing markets. "A weaker dollar is good for EM stocks," says Richard Cook, a portfolio manager of Cook & Bynum fund. A recent rebound in Chinese stocks — 27% of the index — has helped the fund return 18% over the past 12 months.

Baron Emerging Markets (BEXFX) — a member of the Kiplinger 25, our favorite no-load mutual funds — is actively managed, growth focused, and has gained 19% over the same period.

These days, many strategists, including T. Rowe Price's Charles Shriver, see opportunity in small, foreign companies. They typically trade at a premium to their larger brethren, but not now. And "small-cap international stocks will benefit from domestic economic growth in home countries and are less sensitive to tariffs," he says.

We have our eyes on the Avantis International Small Cap Equity ETF (AVDS) and the Dimensional International Small Cap Value ETF (DISV). The Avantis fund invests in a mix of growth and value small companies, with a focus on valuation and profitability. Over the past 12 months, it has gained 23%. The Dimensional exchange-traded fund focuses on bargain-priced small stocks in developed countries and has returned 25% over the past 12 months.

Bonds

Bonds provide ballast to the stock side of any portfolio, generally speaking, because when stocks fall, bond values tend to rise. That didn't happen in 2022, when a precipitous rise in interest rates pushed both stocks and bonds down (bond prices and yields move in opposite directions). The S&P 500 fell 18%, and the Bloomberg U.S. Aggregate Bond index sank 13%.

It was the worst year ever for bonds, but a few fixed-income sectors held up better. Bank-loan funds, for instance, lost 2% on average; short-term bond funds dipped just 5%. Ergo, in 2022, a diversified bond portfolio would have outperformed the Agg index.

Broadly speaking, there are four major bond sectors: government, corporate, securitized debt (bundled IOUs such as mortgages or auto loans, say, that are sold as a single security), and municipal bonds, which pay income that's exempt from federal and sometimes state taxes.

A diversified bond portfolio will include a mix of sectors. The Agg index, for instance, is diversified as far as sectors go: Government bonds make up just less than half of the index, corporate and securitized debt combined are another 50%, and the rest sits in cash and muni IOUs. But there are more layers of bond diversification to consider.

Credit quality

Credit ratings reflect a borrower's financial ability to repay debts. The higher the rating, the more creditworthy the issuer is, and vice versa. That's why investment-grade bonds, rated between triple-A and triple-B, are considered high quality — there's little risk of default. Debt rated between double-B and triple-C is often called junk or high yield — there's a higher risk of default, and therefore yields are higher to attract investors.

Bond portfolios should hold mostly high-quality debt at their core. The Vanguard Total Bond Market ETF (BND) and the iShares Core U.S. Aggregate Bond ETF (AGG) are the biggest index-based high-quality bond ETFs. But we prefer active strategies, such as Baird Aggregate Bond (BAGSX) and Dodge & Cox Income (DODIX). Both mutual funds are members of the Kiplinger 25.

Then consider adding lower-quality debt, which can boost the overall yield of a bond portfolio. In late August, for instance, U.S. high-yield corporate debt yielded 6.7%, and bank loans, issued by companies with low credit ratings, yielded 8.6%.

Our favorite high-yield corporate fund, Vanguard High-Yield Corporate (VWEHX), favors higher-quality, double-B junk bonds. But with economic uncertainty ahead, we're partial these days to short-term high-yield bond funds such as the Pimco 0-5 Year High Yield Corporate Bond Index ETF (HYS). Its short-term focus can help dampen default risk, a concern if the economy slows.

Duration and maturity

Investors often confuse duration, a measure of a bond's sensitivity to interest rate moves, with maturity, the length of time a bond will pay interest before it repays the principal. They're not the same, but they are connected.

Maturity plays a part in the calculation of duration. The longer the maturity, the longer the duration and the more sensitive a security is to interest rate shifts.

The typical long-term government bond fund, for example, has an average maturity of 20 years and a 16-year duration. That implies if rates were to rise by one percentage point, the net asset value of long-term government funds would decline 16%, and vice versa. Short-term government bonds have an average maturity of three years and a duration of 2.6 years.

Generally, low-duration bonds are a defensive bet when interest rates are rising, and high-duration bonds stand to benefit most when rates fall. These days, however, even though cuts in short-term rates are on the docket, a fall in long-term rates isn’t guaranteed, says Akullian, the iShares strategist. That's why she favors intermediate-maturity bonds for now.

The iShares 3-7 Year Treasury Bond ETF (IEI) sports a 4.3-year duration. Since the start of the year, it has returned more than 5%. The actively managed Vanguard Intermediate-Term Bond ETF (BIV) favors bonds with maturities of five to 10 years and has a duration of 6.1 years. Its portfolio holds government and corporate debt of medium maturities. So far this year, it has gained 6.4%.

Finally, the Fidelity Investment Grade Securities ETF (FSEC) holds mostly triple-A-rated securitized debt and has a duration of 5.5 years. Its return so far this year is 5.3%.

Geography

For much of the 2010s, foreign bonds sported negative yields. "That's a hard sell," says Schurmeier, the Harbor Capital portfolio manager. But now, foreign bonds offer positive yields, as well as a potential return boost from a weakening dollar. The Vanguard Total International Bond ETF (BNDX) holds high-quality, foreign corporate and government bonds.

Emerging-markets debt offers fatter yields, but these IOUs tend to be more volatile, too, so buyer beware. Our favorite emerging-markets bond fund, Vanguard Emerging Markets Bond (VEMBX), invests in dollar-denominated debt, which becomes easier for developing countries to repay as the dollar weakens.

Alternatives

This catch-all category includes nontraditional strategies that seek to hedge stock and bond market returns, or at least to generate returns that don't move in lockstep with them.

Alternative strategies might focus on gold, commodities, cryptocurrencies, or the debt or equity of private companies. They might employ techniques to limit losses in a downturn but crimp bull market gains. Others balance bets on undervalued stocks by short-selling overpriced names.

"Many alternative strategies weren't even a thing 10 years ago, but they are today," says Winter, the Salt Lake City CFP.

Consider carving out a small slice from the bond side of your portfolio to devote to alternative assets — no more than 5% to 10% of your overall portfolio, says de Longis. One approach to choosing an alternative strategy is to figure out what kind of risk you're trying to hedge against, such as those listed below, and invest accordingly.

Inflation

To hedge inflation, for instance, beyond the protection the stock side of your portfolio may offer, consider commodities. These funds proved their mettle in 2022, returning 16%, on average.

The First Trust Global Tactical Commodity Strategy Fund (FTGC) has outperformed its peers in four of the past five calendar years, with below-average volatility. Neuberger Berman Commodity Strategy ETF (NBCM) boasts above-average returns with below-average volatility, and its expense ratio is below average, too.

Instability

To ward against uncertainty, consider gold. "Gold is a safety net for chaos," says Schurmeier. Trade-war fears have fueled 29% gains in the iShares Gold Trust Micro (IAUM) and the SPDR Gold MiniShares Trust (GLDM, $68, 0.10%) so far this year.

Volatility

To smooth out your returns, consider one of a new breed of ETFs called defined-outcome funds.

One we're eying is the Innovator Defined Wealth Shield ETF (BALT). Using options, the fund provides a 20% buffer on losses in the S&P 500 every three months in exchange for a cap on gains. You can hold the ETF indefinitely. The 20% buffer and cap on gains resets quarterly, in January, April, July and October. The cap set in early July was 2.2% after expenses. Over the past three years, Defined Wealth Shield has returned 7% annualized with less volatility than the Agg index.

Bear in mind that diversified portfolios, in contrast to Tolstoy's happy families, are not all alike. As always, everything depends on your time horizon and your risk tolerance.

"If you're relatively young and are primarily invested in stocks, you might want to make sure your diversification is robust on the stock side, but on the bond side, your small piece in bonds could be a straightforward U.S. investment-grade type of bond fund portfolio," says T. Rowe Price's Young. Similarly, those who are nearing retirement or already retired will want to pay special attention to some inflation hedges.

Over time, your portfolio will need some fine-tuning. Some tweaks are related to age or life stage, says Christine Benz, director of personal finance and retirement planning for Morningstar.

At age 50, for instance, you'll want to de-risk your portfolio a bit around the edges. Tilt toward high-quality, large-company stocks over small-cap fare, for instance. Or favor dividend payers. By your late fifties or early sixties, start shoring up your portfolio with safer assets. On the bond side, for instance, lean into high-quality short and intermediate-term bonds and build up your cash position.

Other adjustments may be tactical, such as investing more in large and midsize companies than in small firms if a recession looms, or favoring short-term bonds over long-maturity debt when interest rates are climbing. Keep the tactical moves to no more than five to 10 percentage points up or down from your overall portfolio targets, says Invesco's de Longis. Any bigger, and you risk derailing your asset-allocation plan.

Finally, review your portfolio asset mix and rebalance, if necessary, once a year. "The more diversified your portfolio, the greater the potential benefits of rebalancing," says Winter. Just don't go overboard. Think of your portfolio like a bar of soap, suggests Benz: "The more you touch it, the smaller it's going to get."

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Amid the record-long government shutdown, data from employment agency Challenger, Gray & Christmas showed U.S. employers announced 153,074 job cuts in October. That's up 183% from the 54,064 cuts announced in September and 175% compared to October 2024. October layoffs hit their highest level since 2003, and hiring slowed to a 14-year low.

"October's pace of job cutting was much higher than average for the month," said CG&C Chief Revenue Officer and workplace expert Andy Challenger. "Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes."

The agency said employers have announced 1.1 million job cuts year to date through October, up 65% vs the first 10 months of 2024 and 44% from the 761,358 cuts announced for the full year. Year-to-date job cuts are at the highest level since 2020, when 2.3 million cuts were announced through October.

Cleveland Fed President Beth Hammack said today that inflation is a bigger risk than a weak employment market. "After last week's meeting," Hammack said in remarks prepared for delivery at the Economic Club of New York, "I see monetary policy as barely restrictive, if at all. It's not obvious to me that monetary policy should do more at this time."

Chicago Fed President Austan Goolsbee told CNBC he's uneasy about cutting interest rates given the lack of inflation data during the shutdown.

Meanwhile, a looming Supreme Court decision on President Donald Trump's tariffs introduces another potential layer of uncertainty for global markets.

At the closing bell, blue-chip Dow Jones Industrial Average had fallen 0.8% to 46,913, the tech-heavy Nasdaq Composite was down 1.9% to 23,053, and the broad-based S&P 500 had shed 1.1% to 6,720.

Up and Down with Papa Dow

Many technical analysts will say the Dow Jones Industrial Average is still the most important stock market index in the world, and not just because it's one of the two oldest.

The Dow Industrials debuted on May 26, 1896, while the Dow Jones Transportation Average was originally published as the Dow Jones Railroad Average on July 3, 1884. What Dow Jones stocks do is cover many sectors without overloading any one or two or three in particular.

It only includes 30 names, but it is at least as diversified as the S&P 500 and is much more so than the Nasdaq-100, the underlying index for the widely held Invesco QQQ Trust (QQQ, -1.9%), the most famous but not necessarily the best Invesco ETF to buy.

The Dow is a price-weighted index, while the S&P 500, the Nasdaq Composite and the Nasdaq-100 are market-cap weighted indexes. According to Dow Jones and FactSet, a $1 move in one of its components translates into a 6.16-point move for the index.

Today, for example, the price of Salesforce (CRM) – one of the 10 best tech stocks of all time, by the way – fell $13.41, or 5.3%, and took an 82.6-point bite from the index.

Magnificent 7 bellwether Nvidia (NVDA) declined 3.7% from $195.21 to $188.08 and pulled 43.9 points from Papa Dow. Amazon.com (AMZN, -2.9%) and Microsoft (MSFT, -2.0%) also dragged on the index.

Modest gains for old-school large-cap stocks International Business Machines (IBM, +1.9%), Merck & Co. (MRK, +1.7%), Chevron (CVX, +0.2%), JPMorgan Chase (JPM, +0.6%) and Johnson & Johnson (JNJ, +0.6%) – representing tech, health care, energy, financials and consumer staples – weren't enough to offset the magnitude of CRM's and NVDA's losses.

What NRG can tell us

NRG Energy (NRG) looks like an energy stock and a utility stock, producing natural gas and coal and also generating and selling electricity. And it occupies a sweet spot with regard to rising demand for power to keep the AI revolution and data centers humming. Indeed, the stock was up more than 90% year to date vs a little more than 14% for the S&P 500 heading into this morning's third-quarter earnings announcement.

NRG reported earnings of $2.78 per share, up from $2.10 a year ago, and management reaffirmed the full-year EPS guidance it raised in September from $7.55 to $8.15. The board also authorized a $3 billion share repurchase program and an 8% dividend increase.

The power producer, which continues to benefit from surging electricity demand driven by data-center construction in Texas, expects 2026 core profit of $3.93 billion to $4.18 billion vs updated 2025 guidance of $3.88 billion to $4.03 billion.

"We see progress with NRG's strategic effort to capitalize on rising power demand," writes CFRA Research analyst Daniel Rich, who notes the company has signed 445 megawatts (MW) of new data-center agreements year to date, a 51% increase from the second quarter.

Despite the impressive results, NRG ended the day down 1.9% amid the broader selloff in all things AI.

How to be a trillionaire

Tesla (TSLA, -3.5%) recovered from its intraday lows but was down as much as 5.9% leading up to the company's annual meeting and a highly charged shareholder vote on a proposed $1 trillion pay package for CEO Elon Musk.

As Karee Venema notes, "The compensation comes with some fairly steep hurdles that the electric vehicle maker will need to surpass in order for Musk to collect, which could have big implications for the Magnificent 7 stock."

A key factor in the vote is the composition of TSLA's shareholder base – Elon Musk's constituency, if you will. According to data compiled by Bloomberg, retail investors own 41% of outstanding TSLA stock, while institutions such as mutual funds and exchange-traded funds hold 59%.

Retail investors own an average of about 25% of the other Mag 7 stocks. And they own an average of 5% of stocks in the S&P 500.

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The ADP National Employment Report showed private employers added 42,000 jobs in October, marking the first monthly gain since July, to top a consensus forecast of 30,000. September's net job loss was revised higher to 29,000.

The report divided labor market observers, even those in different parts of the same house. "Employment is stagnating in the fall," writes Comerica Bank Chief Economist Bill Adams, "according to data available during the shutdown." Adams emphasizes that overall employment was likely "about flat" in October "after accounting for federal layoffs, which aren't measured by ADP."

The economist adds that the three-month moving average of 3,000 for the ADP data is "basically a rounding error." According to Adams, "The economy seems to have hit an air pocket in the fourth quarter as the government shutdown compounded headwinds from tariffs and a weak housing market." The shutdown is now the longest on record.

But Comerica Wealth Management Chief Investment Officer Eric Teal sees a different picture: "The job market is firming, despite some notable downsizing from Fortune 500 companies." Teal expects the job market to improve for entry-level workers and service industries as Trump administration immigration policies take effect, though he warns of potential for renewed wage-related inflation pressures.

Meanwhile, the Supreme Court heard oral arguments today in a case about President Donald Trump's tariffs. Justices questioned the legality of using emergency powers to impose his new levies. The Court, which agreed to hear the case at issue on an expedited basis, could issue a ruling before the end of 2025.

At the closing bell, the tech-heavy Nasdaq Composite had risen 0.7% to 23,499, the broad-based S&P 500 was up 0.4% at 6,796, and the blue-chip Dow Jones Industrial Average had added 0.5% to 47,311.

Lemonade is making insurance from artificial intelligence

Lemonade (LMND) was up 34.1% and closed near its intraday high after management of the insurance company said third-quarter revenue grew by 42.4% to $194.5 million. Its loss of 51 cents per share was better than the 70 cents Wall Street forecast. And it's fair to call LMND another smart AI stock to buy.

"The use of artificial intelligence has been significantly booming over the last few years in the insurance world," Claims Journal reported in March, "but for the people at Lemonade, artificial intelligence has been a mainstay in automating claims and processes since its inception in 2015."

Management highlighted "AI-powered improvements in segmentation and pricing" and said AI also helped keep operating expenses, excluding growth spend, almost flat.

Lemonade (pdf) reported a 46.3% year-over-year increase in net premiums earned, a key measure of core insurance operations. Management also raised full-year revenue guidance to a range of $727 million to $732 million from $710 million to $716 million and narrowed its adjusted EBITDA loss guidance to $127 million to $130 million from $135 million to $140 million.

I'm a No. 9 guy now

McDonald's (MCD) survived another renumbering of its iconic two-cheeseburger "extra value" meal (it used to be the No. 2, then it was the No. 7, now it's the No. 9) and saw accelerating third-quarter sales growth as budget-conscious consumers turned to cheaper options amid persistent economic uncertainty. The burger giant missed analyst estimates, but MCD was still among the top Dow Jones stocks on Wednesday with a gain of 2.2%.

McDonald's reported earnings of $3.22 per share vs $3.23 a year ago and a Wall Street forecast of $3.33. Revenue was in line with expectations at $7.08 billion (+3.0% year over year). McDonald's added new items and value deals to its menu, highlighted by a 15% price cut on eight combo meals.

"We increased global systemwide sales by 6% and grew comp sales across all segments, a testament to our ability to deliver sustainable growth even in a challenging environment," CEO Chris Kempczinski said, underscoring the importance of "delivering everyday value and affordability, menu innovation, and compelling marketing."

And maybe AMGN will fix it

Amgen (AMGN) led the Dow after the drugmaker reported third-quarter EPS of $5.64 (+1.1% YoY) on revenue of $9.56 billion (+12.4% YoY), topping consensus estimates of $5.02 and $8.97 billion, respectively, and raised full-year guidance. The health care stock rose 7.8%.

Management now expects 2025 EPS of $20.60 to $21.40, up from $20.20 to $21.30, on revenue of $35.8 billion to $36.6 billion up from $35 billion to $36 billion. CEO Bob Bradway cited strong volume growth for results and disciplined investment as well as "a pipeline of first-in-class medicines" for the updated guidance.

Amgen expects to report trial data for two weight-loss drug studies by the end of December, one testing MariTide in obese or overweight adults with or without type 2 diabetes, another as a treatment for type 2 diabetes. Management has completed enrollment in two Phase 3 studies for similar patients.

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This risk-off mood was seen in other corners of Wall Street, too, with bitcoin tumbling below the $100,000 mark for the first time since June.

At the close, the tech-heavy Nasdaq Composite was down 2.0% at 23,348, the broader S&P 500 was off 1.2% at 6,771, and the blue-chip Dow Jones Industrial Average had shed 0.5% to 47,085.

Palantir was one of the most notable decliners today, shedding 7.9% despite the big data analytics firm's impressive earnings report.

After Monday's close, Palantir said third-quarter earnings doubled to 21 cents per share, while revenue surged 63% to $1.18 billion – more than analysts expected. The company also gave stronger-than-anticipated fourth-quarter guidance and raised its full-year revenue and free cash flow guidance.

"This was a major validation moment for Palantir about AI demand and the growth trajectory over the next few years, which is accelerating at an eye-popping pace," says Wedbush analyst Daniel Ives.

But fears of a market bubble have been swirling – and Palantir's meteoric rise is not helping the matter. Indeed, shares were up 174% for the year to date heading into Tuesday's session to trade at 294 times forward earnings. By comparison, Nvidia (NVDA, -4.0%) trades at 44 times forward earnings.

Additionally, several Wall Street CEOs, including Morgan Stanley's (MS) Ted Pick, said during a financial summit in Hong Kong on Tuesday that "markets seem expensive" and there's a "possibility" of a 10% to 15% drawdown in the near term.

"Valuation angst is hampering animal spirits in markets," says José Torres, senior economist at Interactive Brokers. "Furthermore, there's a general sense amongst equity bears that a pullback is long overdue, even as the calendar offers a favorable seasonal backdrop, considering that November and December tend to deliver some of the strongest returns."

Still, unlike Michael Burry, who revealed a massive short position on Palantir, Wedbush's Ives is overwhelmingly bullish on the stock. He believes any selloff represents an opportunity for long-term investors, and says he "would be buying [PLTR] all day long given our view that this will be one of the AI tech stalwarts over the next decade."

Uber stock sinks after earnings

Uber Technologies (UBER) was another post-earnings decliner, falling 5.1% after the ride-sharing company's third-quarter results.

UBER reported stronger-than-expected earnings of $3.11 per share thanks to a $4.9 billion tax benefit, while revenue of $13.5 billion also topped estimates. Uber's third-quarter trips jumped 22% year over year and gross bookings increased 21%.

"Uber's app is truly becoming the 'super app' they've envisioned – rideshare, food delivery, groceries, and, increasingly, autonomous rides," says Eric Clark, portfolio manager of Alpha Brands' LOGO ETF. "They keep adding new services that build user frequency and engagement, which drives higher gross bookings and profitability."

But considering the industrial stock was up 65% for the year to date heading into Tuesday's session, today's decline represents consolidation "after a big run," says Clark.

Hertz soars 36% on earnings beat

Not all of the day's post-earnings price action was to the downside. Hertz Global Holdings (HTZ) surged 36.2% after the car rental company disclosed its third-quarter results.

For the three months ending September 30, Hertz reported earnings of 12 cents per share compared to a per-share loss of 68 cents in the year-ago period. While revenue slipped 4% to $2.5 billion, the company said its utilization rate topped 84%, its highest level since 2018.

Most of Wall Street remains on the sidelines when it comes to the company that emerged from Chapter 11 bankruptcy just four years ago. Of the 10 analysts covering HTZ who are tracked by S&P Global Market Intelligence, six say it's a Hold and four have it at Sell or Strong Sell. This works out to a consensus Hold recommendation.

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It was a choppy start to November as market participants looked ahead to a busy week of earnings reports and little sign that the government shutdown will end anytime soon. However, two of the three main indexes closed higher as Amazon.com (AMZN) kept climbing.

At the close, the S&P 500 was up 0.2% at 6,851 and the Nasdaq Composite had added 0.5% to 23,834. The Dow Jones Industrial Average, however, was down 0.5% at 47,336.

The next several sessions feature an onslaught of corporate earnings reports, with big data analytics firm Palantir Technologies (PLTR) included in the lineup. PLTR stock rose 3.4% ahead of its third-quarter results, due after Monday's close, bringing its year-to-date return to 174%.

While impressive, it's actually Robinhood Markets (HOOD) that's the best S&P 500 stock of the year, up 295% so far. The online trading platform will take its place on the earnings stage after Wednesday's close.

Robinhood released September metrics that showed solid growth across the platform, which has Needham analyst John Todaro forecasting above-consensus earnings of 60 cents per share on revenue of $1.27 billion.

"We remain impressed with HOOD's product expansion, and we see additional opportunities in banking, futures, tokenized RWA & prediction markets," says Todaro, adding that he believes HOOD is "the farthest along" among financial services platforms to "becoming a 'one-stop shop.'"

Amazon inks a $38 billion deal with OpenAI

Amazon jumped 4% – making it the best Dow Jones stock Monday – after OpenAI agreed to buy $38 billion worth of capacity from the company's Amazon Web Services cloud segment.

According to the press release, OpenAI will utilize "hundreds of thousands of state-of-the-art" Nvidia (NVDA, +2.2%) artificial intelligence (AI) chips to run its workloads, "with the ability to expand to tens of millions of CPUs to rapidly scale agentic workloads."

"Scaling frontier AI requires massive, reliable compute," said OpenAI co-founder and CEO Sam Altman. "Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone."

The partnership comes on the heels of Amazon's blowout third-quarter earnings report, which sent the blue chip stock up nearly 10% on Friday.

Kenvue pops on $40 billion buyout bid

Kenvue (KVUE) soared 12.3% after Kimberly-Clark (KMB) agreed to buy the consumer products company, which was spun off from Johnson & Johnson (JNJ) in 2023, for $40 billion in cash and stock. KMB, meanwhile, slumped 14.6% to close at its lowest level since mid-2018.

"The proposed Kimberly-Clark acquisition offers immediate value of $3.50 cash per share plus participation in a larger health and wellness leader," says CFRA Research analyst Ana Garcia, who has a Buy rating on Kenvue.

It's been a tough few months for KVUE stock after President Donald Trump and Health and Human Services Secretary Robert F. Kennedy, Jr., suggested in late September that there is a link between pregnant women taking products with acetaminophen, such as Kenvue's Tylenol, and a child developing autism.

And while Kennedy said in late October that there is not "sufficient" evidence to support that claim, KVUE stock was still down more than 30% in the past three months heading into today's session.

Factory activity cooled in October

This week's economic calendar features several key updates, though it's likely the October jobs report – initially scheduled for release ahead of Friday's open – will be delayed amid the ongoing government shutdown.

This makes Wednesday morning's ADP National Employment Report a key event that we're watching. Wednesday also marks when the Supreme Court will begin hearing oral arguments on the legality of President Trump's tariff policies.

Today, the Institute for Supply Management (ISM) said its Manufacturing Purchasing Managers Index (PMI) fell to 48.7 in October from September's reading of 49.1. This marks the eighth straight month that factory activity has contracted, as indicated by a reading below 50.

"U.S. manufacturing has been in contraction mode for most of this year, with tariffs getting much of the blame, according to respondents in the survey," says Priscilla Thiagamoorthy, senior economist at BMO Capital Markets. "Weakness in the factory sector is expected to persist, even as the broader economy continues to expand."

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At the close, the blue-chip Dow Jones Industrial Average was up 0.09% at 47,562, the broader S&P 500 was 0.3% higher at 6,840, and the tech-heavy Nasdaq Composite had added 0.6% to 23,724. For the month, the benchmarks rose between 2.5% and 5%.

Amazon helped boost all three indexes, climbing 9.6% after its third-quarter results. The e-commerce giant beat on both the top and bottom lines and said revenue in its Amazon Web Services cloud segment was up 20% year over year.

"We continue to see strong momentum and growth across Amazon as AI drives meaningful improvements in every corner of our business," said Amazon CEO Andy Jassy in the earnings release. "AWS is growing at a pace we haven't seen since 2022."

The company also raised its full-year capital expenditures forecast – to $125 billion from $118 billion – and Chief Financial Officer Brian Olsavsky expects spending to be even higher next year.

"We'll continue to make significant investments, especially in AI, as we believe it to be a massive opportunity with the potential for strong returns on invested capital over the long term," said Olsavsky on the earnings call.

Apple edges higher after earnings

Apple (AAPL) bounced between positive and negative territory in Friday's session, eventually closing down 0.4%.

Late Thursday, the tech giant reported higher-than-expected fiscal fourth-quarter earnings and revenue. It also gave a strong revenue forecast for its fiscal first quarter.

But Wall Street seemed a little worried about softer-than-expected iPhone revenue and weak sales in China.

"Tariffs continue to remain a headwind to margins," says Wedbush analyst Daniel Ives, although he notes that the majority of iPhones being sold in the U.S. are now produced in India, "given the complex Trump tariff backdrop."

Ives reiterated his Outperform (Buy) rating on the blue chip stock and raised his price target to $320 from $310 – representing implied upside of more than 18% to current levels – on "increased confidence in the Apple growth story as the iPhone 17 launch is off to a great start heading into the key holiday December quarter in the U.S. and China."

Exxon hikes its dividend for a 43rd straight time

Over in the energy sector, Exxon Mobil (XOM, -0.3%) reported third-quarter earnings of $1.88 per share on revenue of $3.4 billion, beating analysts' estimates even as oil prices slumped more than 4% over the three-month period.

"We delivered the highest earnings per share we've had compared to other quarters in a similar oil-price environment," said Exxon CEO Darren Woods in the earnings release. "In Guyana, we broke records with quarterly production surpassing 700,000 barrels per day," and "we also set another production record of nearly 1.7 million oil-equivalent barrels per day [in the Permian basin]."

Exxon also hiked its quarterly dividend by 4% to $1.03 per share, marking the 43rd straight year its raised its payout.

Why is this important to investors?

"Shares in companies that raise their payouts like clockwork decade after decade can produce superior total returns (price change plus dividends) over the long run, even if they sport apparently ho-hum yields to begin with," writes Kiplinger contributor Dan Burrows in his feature "Best Dividend Stocks to Buy for Dependable Dividend Growth."

Case in point: Over the past 12 months, XOM is down 1.9% on a price basis, but when you add in the dividend, its total return is +2%.

Netflix splits its stock

In non-earnings news, Netflix (NFLX) jumped 2.7% after the streaming giant announced a 10-for-1 stock split. This marks the third stock split for Netflix: a 2-for-1 split on February 11, 2004, then a 7-for-1 on July 14, 2015.

"The purpose of the stock split is to reset the market price of the Company's common stock to a range that will be more accessible to employees who participate in the Company's stock option program," Netflix said in its press release.

The split won't change anything about the company's fundamentals or market valuation. Rather, it's similar to making change. In NFLX's case, it will be equivalent to breaking a $10 bill into 10 $1 bills.

Based on NFLX's October 31 close at $1,118.86, the 10-for-1 stock split will bring the share price to about $112.

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Netflix (NFLX) has given long-term investors plenty to cheer about. In the past 15 years, NFLX stock has averaged an annual gain of 28.9%, easily outpacing the S&P 500's 14.8% total return (price change plus dividends). The streaming giant's next move could encourage a new crop of folks to look its way.

After the close on Thursday, October 30, Netflix announced that its board of directors approved a 10-for-1 stock split. It will begin trading on a post-split basis at the open today, November 17.

This marks the third stock split for Netflix: A 2-for-1 split on February 11, 2004, and then a 7-for-1 on July 14, 2015.

"The purpose of the stock split is to reset the market price of the company's common stock to a range that will be more accessible to employees who participate in the Company's stock option program," Netflix said in its press release.

Shares closed at $1,154.23 on Friday, November 14, a price point that's out of reach for most retail investors.

What does the Netflix stock split mean?

As for Netflix's stock split, it won't change anything about the company's fundamentals or market valuation. Rather, a stock split is similar to making change. In NFLX's case, it will be equivalent to breaking a $10 bill into 10 $1 bills.

Based on NFLX's November 14 close, the 10-for-1 stock split brings the share price to just over $111 at Monday's opening bell. This makes it much more attractive for retail investors, as well as Netflix employees participating in the company's stock purchase plan who were unable to buy NFLX stock at its former four-figure share price.

O'Reilly Automotive (ORLY) underwent a similar stock split earlier this year. The auto parts retailer cited the importance of keeping its share "more accessible to team members and investors" as the reason behind its 15-for-1 split. Financial firm Interactive Brokers (IBKR) also split its stock recently.

Wall Street says Netflix stock's still a buy

Netflix gapped lower in October after the streaming company missed third-quarter earnings expectations due to an expense related to an ongoing dispute with Brazilian tax authorities, but analysts don't seem too concerned.

"Netflix's Q3 results and Q4 guidance underwhelmed investors after several quarters of phenomenal results," said Wedbush analyst Alicia Reese. "With much still to prove, we think Netflix is positioning for substantial growth in global advertising, and that should not be overlooked."

Reese added that recent data checks suggest subscriber growth is continuing and price hikes are being absorbed with little resistance. Plus, "Netflix continues to enhance its ad business by expanding partnerships, improving targeting, and adding more live content. We expect ad revenue to become Netflix's primary revenue driver beginning in 2026, with significant opportunities in 2027."

Reese has an Outperform (Buy) rating on Netflix stock and she's hardly alone in her bullish outlook toward the communication services stock.

Of the 49 analysts covering Netflix stock tracked by S&P Global Market Intelligence, 26 say it's a Strong Buy, eight have it at Buy, 13 rate it a Hold and two have it at Strong Sell. This works out to a consensus Buy rating.

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Facebook parent Meta Platforms (META, -11.3%) and tech giant Microsoft (MSFT, -2.9%) made two of the most notable post-earnings moves today. Both Magnificent 7 stocks ended sharply lower as spending concerns overshadowed quarterly beats.

Meta, for one, reported higher-than-expected third-quarter earnings and revenue and strong fourth-quarter guidance. It also raised the lower end of its full-year expense forecast by $2 billion, now expecting total expenses of $114 billion to $118 billion in 2025 – up nearly 22% at the midpoint from 2024.

And in Meta's earnings call, Chief Financial Officer Susan Li said the company expects "total expenses will grow at a significantly faster percentage rate than 2025, with growth primarily driven by infrastructure costs, including incremental cloud expenses and depreciation."

Microsoft beat on the top and bottom lines for its fiscal 2026 first quarter, but the company's capex of $34.9 billion came in above the $30 billion it forecast in July.

Additionally, Chief Financial Officer Amy Hood said on the earnings call that the capex growth for fiscal 2026 will "be higher than fiscal year 2025" amid increased spending on "GPUs and CPUs" to power its artificial intelligence (AI) infrastructure.

Wall Street isn't worried about Alphabet's AI spending

Increased spending isn't a concern for Alphabet (GOOGL), though, with the communication services stock jumping 2.5% after its earnings report.

The Google parent said third-quarter earnings rose 35% year over year to $2.87 per share, while revenue increased 16% to $102.3 billion – both figures higher than analysts expected.

Google Services revenue jumped 14% on solid YouTube ad sales, while Google Cloud revenue, which houses its AI segments, surged 34%. Alphabet also increased its full-year capital expenditures amid "growth across our business and demand from Cloud customers."

"Alphabet just delivered its first-ever $100 billion quarter, silencing the doubters with standout performances in both Search and Cloud," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. "AI Overviews and AI Mode are clearly resonating with users, helping to ease fears that Google's core search business is under threat from generative AI."

Chipotle suffers its biggest one-day drop in 13 years after earnings

Elsewhere on the earnings calendar, Chipotle Mexican Grill (CMG) plunged 18.2% after its third-quarter results, marking the blue chip stock's biggest one-day drop since July 20, 2012, whe it fell 21.5%.

The burrito chain's Q3 earnings of 29 cents per share were in line with estimates, but revenue of $3 billion fell short, as traffic declined 0.8%. It also said it expects full-year same-store sales to contract by a low single-digit percentage.

"Our third-quarter performance fell short of our expectations due to persistent macroeconomic pressures," said Chipotle CEO Scott Boatwright in the earnings call.

He pointed to the 25- to -35-year-old age group – a key demographic for Chipotle – as "facing several headwinds, including unemployment, increased student loan repayment and slower real wage growth."

Trump says he'll cut tariffs on China

In one of the week's high-stakes events, President Trump and Chinese President Xi Jinping met in their first face-to-face meeting in six years.

The two leaders reached agreements on several issues, with Trump saying he will lower tariffs on China related to fentanyl to 20% from 10% and extend the pause on reciprocal tariffs for the next 12 months.

Xi, meanwhile, authorized the purchase of agricultural products, including soybeans, from the United States. Beijing will also delay restrictions on rare earth minerals for one year.

The leaders also discussed Ukraine and Russia, with Trump telling reporters that the two countries are "both going to work together to see if we can get something done."

But the agreements weren't enough to overcome disappointing mega-cap earnings. The blue-chip Dow Jones Industrial Average fell 0.2% to 47,522, the broader S&P 500 shed 1% to 6,822, and and the tech-heavy Nasdaq Composite slumped 1.6% to 23,581.

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That makes sense, but what didn't make sense was his "how" — he planned to live off dividends and pass the principal along to her.

Even if you can afford to do this, I don't think it's advisable, for a few reasons.

1. Dividend yields are low

As of October 2025, the dividend yield of the S&P 500 is less than 2%. Of course, you can find dividend yields over 2%, but that typically requires a more concentrated portfolio.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

For today's purposes, let's pretend you have a diversified portfolio with a dividend yield of 2% that you plan to use for your monthly expenses. Say you need $15,000 a month or $180,000 a year. To generate that entire amount from dividends would require a portfolio of $9 million.

This oversimplifies the issue, but if I were to build a financial plan for someone who came into my firm and said, "I need $15,000 a month, so how much money do I need to retire?" the number would be far less.

Most financial planning software will use a total return approach. You can access a free version of what we use online.

2. When you search for yield, you invite risk

If you are buying stocks based only on the dividend yield, you are likely inviting a lot of risk into your portfolio. Dividend yield is calculated by dividing the annual dividend by the share price.

So, as share prices decrease, dividend yields increase. If you are searching for yield, you may just be filtering for companies that have seen significant drops in their share price.

If you can find high yields without significant price drops, my guess is that these companies are concentrated in sectors of mature stocks that have a history of high dividends.

Think utilities, financials, energy and so on. This is not to say these are bad investments, but you are betting on specific sectors, which may lead to a bumpy ride.

This is not unique to stock investing. If you are buying a bond with a significantly above-market coupon, there is risk that you are being paid for. That's why high-yield bonds were called junk bonds until the marketing department got its hands on them.

3. They are just giving you your own money back

If you had $1 million in the bank and went in every quarter and took out $5,000, it would be tough to call this an income strategy. But in a way, this is the same structure as dividend investing.

If you own a stock worth $100 that pays a 2% dividend, when it pays the quarterly dividend of $0.50, the stock drops by that amount; i.e., your $100 stock is worth $99.50. Just as your bank account would contain $995,000 after taking out one quarter's income.

Of course, this is not totally apples-to-apples. In a bank account, your remaining funds are in a deposit account. In the dividend example, you are staying invested in the stock with 98% of the money.

The important point is that dividends aren't "free money." They are giving you your money.

4. The tax consequences

I'm both a CFP® professional and an IRS enrolled agent, so tax planning is a huge part of our value proposition for our clients and prospective clients. Prospective clients often come to our firm to get a second opinion on a new tax strategy that another adviser is proposing.

Nine times out of 10, it is a permanent life insurance policy with a new marketing name. The point is that it is very hard to avoid taxation altogether. You just want to make sure that your income strategy is efficient.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Dividends are taxable whether or not you reinvest them. Some dividends are taxable at capital gains rates. Others are taxable at income tax rates, which are higher.

Either way, if you have a significant yield, you will show a significant amount of income on the front page of your 1040.

You may be better off holding those high-dividend payers in a tax-sheltered vehicle, such as an IRA.

Additionally, if you are in a high tax bracket, it may make sense to live off a municipal bond portfolio and hold the stocks in your retirement account.

5. It's going to be a roller coaster

Dividends are typically generated by mature stocks. "Stocks" is the key word. If this is your entire strategy, then, in theory, your entire portfolio is in stocks.

Our retirees typically have 60% to 70% in stocks. While this could never be guaranteed, a portfolio of 60% stocks is likely to experience a smoother ride than one of 100% stocks.

There is an ever-increasing number of dividend strategies that make sense in certain situations.

For example, a Dividend Aristocrat strategy buys stocks that have historically increased dividends. When you reinvest those dividends, you have historically done well.

I also regularly come across clients with six figures or more in utility stocks that they basically forgot about but have been reinvesting dividends for several decades.

The common thread among these effective strategies is that they are effective for accumulation. When it comes to decumulation, I believe there are better ways.

The examples provided are hypothetical and for illustrative purposes only.

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Nvidia (NVDA) was one of the most talked-about stocks today after the artificial intelligence (AI) bellwether rose 3% to become the first company to close with a $5 trillion market cap.

NVDA's latest leg higher came as CEO Jensen Huang on Tuesday unveiled several new deals, including a $1 billion stake in networking equipment firm Nokia (NOK).

"NVDA's approach to scaling up, scaling out, and scaling across will continue to improve the economics of future data centers," says CFRA Research analyst Angelo Zino. And the company's "new partnerships across markets like autos, robotics, communications, and quantum computing … will help spur greater AI uses cases through the end of the decade."

Also working in Nvidia's favor was President Donald Trump, who told reporters he'll "be speaking" to Chinese President Xi Jinping about Nvidia's "super duper" Blackwell AI chip when the two leaders meet on Thursday. Blackwell is Nvidia's most advanced AI chip, and current export controls restrict the company from selling it to China.

NVDA's big gains spurred upside in several mega-cap chip stocks, including Advanced Micro Devices (AMD, +2.5%), Broadcom (AVGO, +3.5%) and Micron Technology (MU, +2.1%).

Fiserv has its worst day ever after "abysmal" earnings

Elsewhere on Wall Street, Fiserv (FI) plunged 44% – its worst day ever – after the fintech and payments firm reported third-quarter earnings of $2.04 per share on revenue of $4.92 billion. This fell well short of analysts' estimates for earnings of $2.64 per share on $5.35 billion in sales.

The company also cut its full-year guidance due to what CEO Mike Lyons says is "slowing cyclical growth in Argentina" and an overreliance on short-term initiatives, which have impacted the company's ability to build long-term relationships with clients.

"As a result, we have made the decision to deprioritize these short-term revenue and expense initiatives, which, of course, has some near-term impact on our growth and profitability," Lyons said on Fiserv's earnings call.

Fiserv also announced several leadership changes, including a new chief financial officer. Additionally, it will transfer its stock exchange listing to the Nasdaq from the New York Stock Exchange and will change its ticker symbol to "FISV," effective ahead of the November 11 open.

"Investor sentiment was already very weak on FI before this morning's news," say BTIG analysts. And the "abysmal" results "will only make investor appetite more challenged."

More Magnificent 7 earnings roll in

The earnings calendar heats up after the close, with Magnificent 7 stocks Alphabet (GOOGL) and Meta Platforms (META) set to report. Microsoft (MSFT) will also unveil its quarterly results.

MSFT stock slipped 0.1% today – but maintained its $4 trillion market valuation – on news of an outage in the company's Azure and 365 services.

Microsoft says it is working to resolve this issue and customers can check its Azure status page for updates.

As for the tech giant's earnings report, Jay Woods, chief market strategist at Freedom Capital Markets, says investors want to see how the company's AI investments are "being integrated into their product suite and what impact that will have on revenue."

As for the October Fed meeting

Wednesday's biggest event was the October Fed meeting, where the central bank lowered the federal funds rate by a quarter-percentage point, as expected. It also said it will end its quantitative tightening program on December 1.

"This concludes, for now, a more than three-year process of shrinking the Fed's balance sheet that began in June 2022," says David Payne, staff economist at The Kiplinger Letter. "The Fed will still have about $6.5 trillion in its portfolio, substantially above the $4.5 trillion it had 10 years ago, before the pandemic."

The main indexes held their gains in the immediate aftermath of the Federal Open Market Committee announcement, but swung lower after Fed Chair Jerome Powell suggested market participants shouldn't necessarily expect a December rate cut.

Powell "emphasized in his opening statement that the Fed faces a quandary now, with risks of both rising inflation and rising unemployment," says Payne. "For now, the Fed believes the greater danger is to the labor market, which is why the Fed cut interest rates today. But, 'going forward is a different thing,' suggesting the Fed could pass on cutting rates in December."

At the close, the blue-chip Dow Jones Industrial Average (-0.2% at 47,632) and the broader S&P 500 (-0.3 point at 6,890) were in the red, while the Nasdaq Composite was up 0.6% at 23,958 – a new record closing high.

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At the close, the blue-chip Dow Jones Industrial Average was up 0.3% at 47,706, the broader S&P 500 had added 0.2% to 6,890, and the tech-heavy Nasdaq Composite had gained 0.8% to 23,827.

This is the busiest week for the third-quarter earnings calendar so far, and this morning, several blue chip stocks released their quarterly results.

Among them was Sherwin-Williams (SHW), which reported higher-than-expected third-quarter earnings and revenue and reiterated its full-year forecast. Shares jumped 5.5% as a result – adding to their long-term returns – which made SHW the best Dow Jones stock today.

UnitedHealth pops on Q3 earnings beat

UnitedHealth Group (UNH) was also near the top of the Dow Tuesday, rising 0.5% after the health care giant's beat-and-raise quarter.

It's been a rough year for the health insurer – both on and off the price charts. In addition to managing rising Medicare costs and a Department of Justice investigation into its billing practices, UNH's CEO, Andrew Witty, stepped down in May.

And while the company's upwardly revised full-year earnings outlook of $16.25 per share is notably lower than its year-ago results ($27.66 per share), new CEO, Stephen Hemsley, who previously served in the role from 2006 to 2017, said he is "confident" UNH "will return to solid earnings growth next year."

As for its share price, UnitedHealth was down more than 50% for the year to date through late July. However, shares are up nearly 50% since then, thanks in part to news that Warren Buffett's Berkshire Hathaway (BRK.B) took a stake in the embattled health care stock in the second quarter.

UPS reports earnings beat as reorganization efforts pay off

United Parcel Service (UPS) was another notable post-earnings gainer, jumping 8.0% after the logistics firm reported better-than-expected third-quarter earnings of $1.74 per share on $21.4 billion in revenue.

UPS credited restructuring plans for its strong results. In addition to cutting roughly 48,000 jobs this year, it closed daily operations at more than 90 leased or owned buildings. These efforts resulted in $2.2 billion in cost savings through September 30.

"We are executing the most significant strategic shift in our company's history, and the changes we are implementing are designed to deliver long-term value for all stakeholders," said UPS CEO Carol Tomé in the earnings release.

Amazon layoffs send stock higher

Elsewhere on Wall Street, Amazon.com (AMZN) rose 1.0% after the e-commerce giant said it is laying off roughly 14,000 corporate employees– though a Reuters report puts the number closer to 30,000.

In June, Amazon CEO Andy Jassy said in a memo to employees that the company's embrace of generative artificial intelligence (AI) will "change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs."

And in a memo sent earlier today, Amazon said that as a result of this "transformative technology," the company needs "to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business."

The news comes ahead of Amazon's third-quarter earnings announcement, which is due out after Thursday's close.

Jefferies analyst Brent Thill expects "overall solid numbers" for Amazon's Q3 results, which, when "combined with an improving Amazon Web Services [the company's cloud segment outlook," could give the mega-cap stock a lift.

As for Amazon's retail business, Thill thinks that "resilient macro & consumers as well as efficient marketplace dynamics on Amazon should help offset headwinds from tariffs and value-oriented buying."

Big Tech earnings, Fed meeting on deck

There are a few Big Tech reports to get through ahead of Amazon's earnings event; namely, Alphabet (GOOGL), Meta Platforms (META) and Microsoft (MSFT), which all report after Wednesday's close.

MSFT made a notable move today, becoming just the second company ever – Nvidia (NVDA) being the first – to close with a $4 trillion market cap.

And before these mega-cap earnings start to roll in, Wall Street will get the latest Federal Open Market Committee policy decision. Indeed, the October Fed meeting will wrap up tomorrow afternoon, with the central bank widely expected to issue its second straight rate cut.

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True, the S&P 500 is pricey by a slew of metrics — but that's partly due to its market-cap-weighted construction. The Magnificent 7 stocks driving much of the bull run have a collective weighting of more than 30% in the benchmark index.

However, look at the equal-weight version of the index, in which every component accounts for 2%, and you'll see a more attractive picture.

While the S&P 500 gained nearly 40% since its early April bottom — and trades at more than 23 times forward earnings — the equal-weight S&P 500 is up a more modest 25% in the same span. As such, it trades at less than 18 times forward earnings.

That's not bad.

As the cliche goes: It's not a stock market; it's a market of stocks.

Meanwhile, third-quarter earnings season is underway, and the outlook for corporate profits, revenue and guidance is bright.

"Both the percentage of S&P 500 companies reporting positive earnings surprises and the magnitude of earnings surprises are above their 10-year averages," writes John Butters, senior earnings analyst at FactSet. "In addition, S&P 500 companies are reporting impressive numbers for revenues relative to analyst expectations and year-ago results."

Some of the strongest corporate profit margins since 2021 also helps explain why the market fetches its current multiple, notes DataTrek Research co-founder Nicholas Colas. "It also provides a pathway to even higher valuations," he adds.

Given this supportive backdrop for equities, we decided to suss out some of Wall Street's favorite stocks to buy now — and to see what the bull cases on these names looked like.

Targa Resources

Targa Resources (TRGP) is a top way to play a rebound in the midstream sector of the oil and gas industry. Analysts like the way it operates in nearly every segment of its industry and adore its geographic diversity.

When it comes to gathering, processing, transporting and storing natural gas and natural gas liquids (NGLs) in places such as the Anadarko and Permian Basins, analysts say Targa "overshadows" other energy companies.

"Expected completion of projects in the Permian and Delaware position Targa for further growth," writes Argus Research analyst John Staszak, who rates shares at Buy.

With shares down about 12% for the year to date, they look like a bargain. Analysts' average price target of $206.15 gives TRGP implied upside of about 33% in the next 12 months.

No wonder Argus has so much company in its bullish call. Of the 22 analysts covering TRGP surveyed by S&P Global Market Intelligence, 16 call it a Strong Buy, five say Buy, and one has it at Hold. That works out to a consensus recommendation of Strong Buy.

Take-Two Interactive Software

Video-game publisher Take-Two Interactive Software (TTWO) owns some of the strongest franchises in the massive industry. From Rockstar Games' Grand Theft Auto (GTA) series to NBA 2K from 2K Games, the company doesn't lack for lucrative hits.

Shares are up nearly 40% so far this year, but analysts say they have more room to run. All eyes are on the May 2026 release of Grand Theft Auto VI, which should be a major catalyst.

As important as GTA is to the company's fortunes, it's hardly a one-trick pony. TTWO releases a new edition of its NBA 2K game annually, while major franchises such as Red Dead Redemption, Borderlands and Civilization have historically helped it report beat-and-raise quarters.

That said, investors need to have confidence in the enduring popularity of GTA before they take the plunge into TTWO stock.

"Take-Two's prospects will always be more speculative than we'd prefer, as we think that it will always be dependent on developing the next massive hit," Morningstar notes.

Of the 27 analysts covering TTWO, 21 call it a Strong Buy, three have it at Buy, two rate it at Hold, and one has it at Strong Sell. That works out to a consensus recommendation of Strong Buy.

Boston Scientific

If you've ever undergone a minimally invasive medical procedure, chances are you've used something made by Boston Scientific (BSX). From stents and catheters to pacemakers and implantable defibrillators, BSX is critical to modern medicine.

Analysts say the company's strong pipeline, new product launches and additional acquisitions should continue to support revenue growth and margin expansion.

"BSX has a steady cadence of new product flow across its portfolio and is delivering above-industry growth, with particular outperformance over the past year-plus," notes Oppenheimer analyst Suraj Kalia, who rates shares at Outperform (the equivalent of Buy). "BSX is adding to the portfolio through tuck-in M&A and has several product tailwinds."

Shares are lagging the broader market by about 3 percentage points so far this year, but that just has them primed for outperformance, bulls say. Analysts' average price target of $126.14 gives BSX implied upside of about 25% in the next 12 months.

Of the 34 analysts covering BSX, 25 rate it at Strong Buy, seven say Buy, and two call it a Hold. That works out to a consensus recommendation of Strong Buy, and with high conviction to boot.

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At the close, the Dow Jones Industrial Average was up 0.7% at 47,544, the S&P 500 was 1.2% higher at 6,875, and the Nasdaq Composite had gained 1.9% to 23,637 – new record highs for all three indexes.

Over the weekend, reports emerged that the U.S. and China have hashed out a framework for a trade deal. On Thursday, President Donald Trump is expected to meet with Chinese President Xi Jinping at the APEC summit in South Korea.

"I believe that we have the framework for the two leaders to have a very productive meeting for both sides," U.S. Treasury Secretary Scott Bessent said on NBC's Meet the Press Sunday.

The negotiations reportedly included export controls, reciprocal tariff extensions and TikTok. "Investors are enthusiastic that leaders from both sides are setting the stage for a treaty, which is sparking risk-on sentiments in markets," says José Torres, senior economist at Interactive Brokers.

Apple, Microsoft near $4 trillion market cap

Ahead of their respective turns on the earnings calendar later this week, both Apple (AAPL, +2.3%) and Microsoft (MSFT, +1.5%) neared a $4 trillion market valuation. Currently, Nvidia (NVDA, +2.8%) is the only company that has a $4 trillion market cap, having surpassed this level in July.

Apple is close, though, and ended Monday with a $3.989 trillion market capitalization. The iPhone maker will disclose its fiscal fourth-quarter results after Thursday's close.

"Looking to the fourth quarter, one of the most important areas for investors will be Apple's forward guidance on revenue growth, especially in light of ongoing tariff pressures and uncertainties around its AI strategy," says Matt Britzman, senior equity analyst at Hargreaves Lansdown.

And ahead of its Wednesday evening earnings event, Microsoft finished today with a $3.951 trillion market valuation.

Bernstein analyst Mark Moerdler likes the setup on MSFT ahead of its fiscal Q1 earnings. "We think Azure could accelerate further, hitting 40% year-over-year growth vs guidance of 37%. Momentum in Copilot adoption and benefit from Windows-10 end of life will also contribute to overall strong revenue growth."

Overall, it's been a strong start to the earnings season, but as Daniela Sabin Hathorn, senior market analyst at Capital.com, warns: "The market has become less forgiving," and "recent high-profile names sold off despite respectable prints. With valuations elevated, guidance matters as much as results."

Qualcomm soars on new AI chip

Elsewhere in the Big Tech space, Qualcomm (QCOM) stock surged 11.1% Monday after the company said it is launching its own artificial intelligence (AI) chips – creating new competition for Nvidia and Advanced Micro Devices (AMD, +2.7%).

Qualcomm said that its AI200 chip will go on sale starting next year, while its AI250 chip will be available in 2027.

"Both solutions feature a rich software stack and seamless compatibility with leading AI frameworks, empowering enterprises and developers to deploy secure, scalable generative AI across data centers," the company said in its press release.

Wall Street will be looking for more details on Qualcomm's new AI chips when the company reports fiscal fourth-quarter earnings after next Wednesday's close.

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At the close, the Dow Jones Industrial Average was up 1.0% at 47,207, the S&P 500 was 0.8% higher at 6,791, and the Nasdaq Composite had gained 1.2% to 23,204 – new record highs for all three indexes.

Ahead of the opening bell, data from the Bureau of Labor Statistics showed the Consumer Price Index (CPI) was up 0.3% month over month in September and 3.0% year over year – slower than economists expected.

Core CPI, which excludes volatile food and energy prices, also came in below forecasts.

"The cooler-than-expected CPI confirms what we've seen overall from private data during the government shutdown – little indication that inflation is surging or that the labor market is falling off a cliff," says Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. "For a Fed focused on prudent 'risk management,' that should translate into another rate cut next week, and likely more to follow."

Indeed, according to CME Group FedWatch, futures traders are currently pricing in a 97% chance the central bank will lower the federal funds rate by a quarter-percentage point next Wednesday afternoon. Odds of another rate cut in December have risen to 92% from 73% one month ago.

While delayed from its original reporting date, the BLS released the September CPI today so that the Social Security Administration could calculate the cost-of-living adjustment (COLA) for 2026. But with data collection services still suspended, it's unclear when we'll see the next CPI report.

IBM scores a key quantum-computing win

In single-stock news, International Business Machines (IBM) jumped 7.9% – making it the best Dow Jones stock today – after a Reuters report indicated the tech giant can use Advanced Micro Devices (AMD, +7.6%) chips to run a quantum computing error correction algorithm.

In August, IBM and AMD said they are working together to develop next-generation computers that are capable of solving complex tasks.

And according to Reuters, the ability to use AMD chips to correct quantum-computing errors marks a major step "toward commercializing super-powerful computers."

Quantum computing stocks were in focus on Thursday amid reports that the Trump administration is considering taking a stake in the tech firms. Those media reports were later rebuffed by Commerce Secretary Howard Lutnick.

Ford Motor gains after earnings

Elsewhere on Wall Street, Ford Motor (F) rose 12.2% after the automaker reported higher-than-expected third-quarter results.

"Ford results came ahead of both our and consensus estimates on the back of strong performance in Ford Blue and Pro," says BofA Securities analyst Federico Merendi.

And while the company's guidance drew a lot of attention – Ford lowered its full-year forecast due to the impact from a supplier fire – Merendi acknowledges that "the bottom line is that Ford's business is performing $1 billion ahead of assumptions provided in Q4 2024."

Procter & Gamble (PG, +0.9%), Comfort Systems (FIX, +19.0%) and General Dynamics (GD, +2.7%) all found themselves higher after earnings, as well.

Deckers slumps on soft outlook

Deckers Outdoor (DECK), on the other hand, slumped 15.2% as the shoemaker gave soft full-year sales guidance for its popular Hoka and UGG brands.

"U.S. consumers are beginning to see some price increases," said Deckers Chief Financial Officer Steven Fasching in the company's earnings call. "It is impacting their purchase behavior within the consumer discretionary space," which prompted "a little bit of a reduction" in its outlook.

UBS Global Research analyst Jay Sole doesn't seem too concerned. He reiterated a Buy rating on the consumer discretionary stock, saying he sees "a very good opportunity to buy shares in a growth company significantly undervalued by the market."

Next week's earnings calendar will be a busy one, too, with Alphabet (GOOGL), Amazon.com (AMZN) and Apple (AAPL) among the most notable names reporting.

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At the close, the blue-chip Dow Jones Industrial Average was up 0.3% at 46,734, the broader S&P 500 was 0.6% higher at 6,738, and the tech-heavy Nasdaq Composite had gained 0.9% to 22,941.

Honeywell (HON) emerged as the best Dow Jones stock today, rising 6.8% after the industrial conglomerate reported higher-than-expected third-quarter earnings and revenue thanks to strong aerospace sales.

The company also raised its full-year forecast, which includes the impact of its Solstice Advanced Materials spinoff, set to be completed next Thursday, October 30.

HON is also planning to separate its automation and aerospace technologies businesses in the second half of 2026.

"We view the ongoing portfolio optimization favorably as HON creates three reporting segments aligned with automation, positioning the company for sustainable growth," says CFRA Research analyst Jonathan Sakraida, who has a Buy rating on the blue chip stock.

Oil prices climb on new Russian sanctions

Chevron (CVX) was also near the top of the Dow Thursday, gaining 0.6% as West Texas Intermediate oil prices surged more than 5%.

Boosting the commodity was news that the Treasury Department imposed new sanctions on Lukoil and Rosneft, Russia's two largest oil companies, as negotiations to end the war in Ukraine have stalled.

Earlier this week, President Donald Trump canceled an upcoming summit with Russian President Vladimir Putin, telling reporters at the White House that "it just didn't feel right to me."

"America's new stance is in stark contrast to recent messaging from the White House and took markets by surprise," says Steve Clayton, head of equity funds at Hargreaves Lansdown.

He cautions that only time will tell how effective these sanctions will be, "but President Trump has said that the Indian PM Narendra Modi has assured him that India will cease Russian oil purchases."

Tesla swings higher after earnings

Tesla (TSLA) stock was down more than 5% at Thursday's open in reaction to the electric vehicle maker's third-quarter results (PDF), though shares were 2.3% higher at the close.

While Tesla beat on the top line, with total revenue up 12% year over year, it missed on the bottom line amid lower EV prices and higher costs.

The results weren't enough to move the needle for CFRA Research analyst Garrett Nelson, who reiterated his Sell rating on the Magnificent 7 stock.

"In our view, the release and conference call did not do enough to address concerns surrounding the company's near-term earnings growth trajectory, with management passing on a couple of conference call questions related to future products," says Nelson.

He admits that the company's energy storage and generation business is helping to counter weaker growth in its automotive segment, but warns that "execution risk is high."

Most of Wall Street is on the sidelines when it comes to Tesla. Of the 46 analysts covering the consumer discretionary stock who are tracked by S&P Global Market Intelligence, 15 say it's a Strong Buy, six have it at Buy, 17 call it a Hold and nine rate it a Sell or Strong Sell. This works out to a consensus Hold recommendation.

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