The holidays have arrived, but not every company is feeling the cheer.

The airline sector took a beating over the weekend after Thanksgiving Sunday brought widespread delays and cancellations during what was expected to be one of the busiest travel periods of the year.

Airlines for America projected 31 million passengers would fly between Nov. 21 and Dec. 1. But a mix of stormy weather and the lingering effects of the recent government shutdown took their toll: Over 12,500 flights were delayed and 1,027 were canceled on Sunday alone, according to FlightAware.

The chaos follows a major manufacturing setback. On Friday, Airbus recalled roughly 6,000 aircraft globally amid concerns that intense solar radiation could corrupt flight-control data. Shares fell 3.08% today.

The turmoil caused earlier this quarter by a government shutdown combined with a rough Thanksgiving weekend means that the rest of the holiday travel season is now even more crucial than ever if airlines want to hold on to their 2025 gains. Delta, United, and Southwest are each up between 4% and 6% this year, while the industry-wide JETS ETF has risen 3.6%.

Not everyone’s on the naughty list

While airlines took a hit, other corners of the holiday economy are looking far healthier.

Retail stocks usually rise the week after Black Friday as investors expect discounts to drive strong holiday-quarter sales. That trend should continue this year after Americans spent $11.8 billion shopping online during Black Friday, a 9.1% year-over-year increase.

It’s not just retailers benefiting: BNPL providers are emerging as some of the biggest winners of the season. Adobe reported that $747.5 million in Black Friday purchases were made through BNPL, an 8.9% increase from last year. Looking ahead, Adobe expects $20.2 billion in BNPL spending this holiday season, an 11% year-over-year increase.

That’s great news for BNPL players like PayPal, Klarna, and Afterpay, but Affirm stands out from the crowd: The stock has averaged a 9.1% gain in the week after Black Friday over the past three years, according to Barron’s.

Will Wall Street get its holiday magic?

But even with parts of the holiday economy looking strong, investors may not get their usual Santa Claus rally.

The market’s unpredictable mood lately has powered both sudden rallies and abrupt pullbacks, leaving investors guessing. Rate-cut expectations have been just as volatile: markets now see an 83% chance the Fed will cut rates at its December meeting, up from about 30% just last week.

With sentiment shifting this quickly, the Fed’s decision on Dec.10 has become the next major catalyst, and could determine whether Santa Claus will leave investors with a gift or a stocking full of coal.—SY

🟢 What’s up

• Disney got a boost from “Zootopia 2” with a strong Thanksgiving debut, pulling in $156 million domestically. Shares rose 2.2%.
• DoorDash climbed 3.63% after Sequoia partner Alfred Lin bought about $100 million worth of shares.
• Chip design company Synopsys jumped 4.85% on news that Nvidia invested $2 billion in its common stock as part of a new strategic partnership.
• Bedding product manufacturer Leggett & Platt popped 16.37% following Somnigroup’s proposal to acquire the company in an all-stock deal at a 30.3% premium.
• New Fortress Energy surged 7.38% after winning tentative approval for a $3.2 billion LNG deal in Puerto Rico.

What’s down

• Strategy, Robinhood, and Coinbase slid 3.25%, 4.05%, and 4.76% respectively, after bitcoin tumbled sharply over a 24-hour period
• Korean e-commerce company Coupang dropped 5.36% after a massive data breach exposed customer emails, phone numbers, and shipping addresses.
• Moderna fell 7.01% following reports that an FDA director suggested COVID shots may have been linked to at least 10 child deaths between 2021 and 2024.
• Chinese electric vehicle manufacturers Xpeng and Nio slipped 2.6% and 5.82%, respectively, despite strong November deliveries and expectations for record December volumes.
• Electric aircraft maker Joby Aviation declined 6.65% after Goldman Sachs initiated coverage with a sell rating, citing valuation concerns.
• Shopify fell 5.87% after a Cyber Monday outage left some merchants unable to process transactions during one of the year’s busiest online shopping days.

The traditional investing advice we’ve heard is to never put all your eggs in one basket. If you want to diversify your portfolio, index funds seem like an easy way to do just that. After all, if you put your money into a fund that tracks the entire S&P 500, you’d be forgiven for thinking that you’ve spread your money across 500 different stocks.

The truth, however, is that the vast majority of the S&P 500’s gains this year have been driven by just a couple of companies. In fact, DataTrek Research reported that Alphabet and Nvidia alone account for 34% of the index’s gains this year: Alphabet was responsible for 20%, while Nvidia accounted for 14%.

The S&P 500 is weighted by market cap, giving the Magnificent Seven an enormous influence over the index’s performance. Nvidia accounts for 7% of the S&P 500, while Alphabet’s weight is around 6.21%, and the Mag 7 as a whole makes up 34.89% of the entire index.

It’s easy to see the effect tech stocks have on the overall market—just look at how AI bubble fears took their toll last month—but it’s still startling to learn that Big Tech stocks account for 49% of the S&P 500’s 16.4% gain YTD, according to DataTrek.

That effectively means you’re not really investing in 500 companies anymore, you’re investing in just a handful—and where they go, the market (and your portfolio) will follow.—MR

Sunday wasn’t just your recovery day from the Turkey Trot your in-laws guilted you into: It was also ChatGPT’s third birthday.

It’s officially been three years of large language models reshaping how people work, shop, and think. ChatGPT and its peers catalyzed a powerful stock market rally that has pushed the S&P 500 to break record over record, but the gains came with nonstop cheating, the emergence of “slop”, and “Black Mirror”-like romances between humans and chatbots.

So, as we hit this milestone, let’s take a look back at all the psychosis fun we’ve had along the way.

The AI stock frenzy

Shortly after ChatGPT first dropped, it became the fastest growing consumer app ever. Today, roughly 800 million users use it every week.

Its impact on the stock market has been seismic, shifting investors’ focus squarely to big tech. That’s why the seven most valuable companies in the S&P 500, which include Nvidia, Microsoft, Apple, Amazon, Meta, and Broadcom, have accounted for roughly half of the index’s gains since the chatbot’s release in 2022.

Some of the biggest winners have been the “picks and shovels” providers of the AI race—the companies powering AI hardware, like chips. Nvidia, specifically, has exploded roughly 979% since ChatGPT’s launch. Meanwhile, energy company Vistra gained about 635% since November 2022, according to Barron’s. Power giants NRG Energy and Constellation Energy have roughly quadrupled their stock value since the chatbot’s launch.

The bulls versus the bears

With the market becoming so heavily concentrated in AI stocks, onlookers have raised bubble fears, including the very tech titans pushing the technology the most. The reason is that even while chatbots have been transformative, it’s unclear whether or not the AGI (artificial general intelligence) that Silicon Valley is racing to develop will pan out. If sci-fi-like superhuman robot intelligence isn’t really possible—or takes longer to create than expected—the entire market could crumble.

But AI bulls have their defenders, too. “While the bears will continue to yell ‘AI Bubble’ we continue to point to this tech cap-ex supercycle that is driving this 4th Industrial Revolution into the next few years,” wrote Wedbush analyst Dan Ives in a note today. “This is driving trillions of spending over the next few years and thus will keep this tech bull market thriving despite market fears.”

Perhaps the next three years will prove who’s right.—LB

• Will the Federal Reserve cut rates in December? Here’s where each Fed voter stands right now.
• Goldman Sachs is buying ETF-issuer Innovator Capital Management for $2 billion.
• Stiff competition: AI startup Runway just dropped a new video model that beats peers from Google and OpenAI.
• Switzerland just filed criminal charges against UBS and a Credit Suisse compliance officer over the infamous “tuna bonds” scandal.
• President Trump commuted the sentence of David Gentile, a private equity CEO convicted of fraud.
• Circles keep circling: OpenAI is taking a stake in Thrive Holdings, which is run by Thrive Capital—one of OpenAI’s main investors.
• Mets owner Steven Cohen will build a casino near the team’s Citi Field in Queens, one of three just approved by NYC.

Everyone who took time off for Thanksgiving is still gathering their wits, so thankfully there aren’t any economic reports tomorrow that you need to keep a close eye on.

As for earnings, we’ll hear from Signet Jewellers, Marvell Technology, American Eagle Outfitters, Okta, Crowdstrike, and Gitlab.