U.S. stock indexes surged in November, recording the sixth positive result out of the past seven months and recovering from a slightly negative October. The Dow added about 7.5%, the NASDAQ gained about 6.2%, and the S&P 500 rose 5.7%. Each of the major U.S. stock indexes added more than 1% in a holiday-shortened trading week, extending the previous week’s positive momentum.

Yields of U.S. government bonds fell sharply on Monday after President-Elect Donald Trump announced his selection of Scott Bessent to serve as the next Treasury secretary. The yield of the 10-year U.S. Treasury closed around 4.17% on Friday, down from 4.42% at the end of the previous week.

The Personal Consumption Expenditures Index, the Fed’s preferred inflation gauge, rose at an annual rate of 2.3% in October, up from 2.1% the previous month. Excluding energy and food prices, the core PCE Index rose 2.8% in October, up from 2.7% in September. Elevated inflation has trended downward, allowing multiple major central banks to begin easing monetary policies. This, in turn, is becoming increasingly supportive for economic growth, labor markets and corporate profits.

These trends were further demonstrated in gross domestic product (GDP) and inflation data released last week. Updated estimates for third-quarter U.S. growth demonstrated the economy has held strong, growing by 2.8%, in line with previous estimates.

Overall, market volatility in 2024 has been largely subdued. In fact, multiple asset classes have hit numerous all-time highs during the year. The Russell 2000 Index rose to an all-time high last Monday for the first time since 2021, while the S&P 500 has set more than 50 new all-time highs this year. Additionally, the S&P 500 has seen only three daily declines of 2% or more, well below the 10-year average of nearly nine per year.

Fed Governor Christoper Waller said he anticipates a rate cut this month but will focus on data before the meeting. "Based on the economic data in hand today and forecasts that show that inflation will continue on its downward path to 2% over the medium term, at present I lean toward supporting a cut to the policy rate at our December meeting," Waller said in a text of remarks at a monetary policy forum released by the Fed.

Still, there is argument for the Fed to consider a pause, and jobs data later this week followed by inflation readings next week all come before the Fed's meeting and could influence the decision.