Dollar softens as Beige Book flags uneven spending; AI stocks lead while Solana ETFs record first outflows
The dollar drifted lower in subdued holiday trade as softer U.S. food costs and a K‑shaped spending pattern in the Fed’s Beige Book tempered inflation fears but kept chatter alive about late‑cycle risks. Tech outperformance continued, led by Lam Research, while Solana-linked ETFs saw their first net outflow, underscoring a more selective risk tone.
Holiday-week macro signals: softer food costs, shifting demand
U.S. Thanksgiving dinner costs are estimated to be about 5% lower than last year, with turkey prices easing—an incremental relief for consumers that could trim the near-term headline inflation impulse. At the same time, restaurants are bracing for what operators describe as a roughly 20% jump in Thanksgiving dining out, pointing to a preference shift toward convenience and promotions even as grocery inflation cools from peak levels.
For markets, the mix supports a modest risk-on bias and slightly lower inflation expectations at the margin, a setup that typically weighs on the dollar and front-end U.S. yields into thin holiday liquidity.
Beige Book: K-shaped consumption keeps policy debate nuanced
The Federal Reserve’s latest Beige Book highlighted an uneven consumer backdrop: higher-income households continue to spend—particularly in financial assets and AI-linked names—while lower- and middle-income consumers are cutting back. That K-shaped pattern keeps the policy path finely balanced. Slowing goods disinflation plus resilient services spending argue for patience, but any renewed softening in demand could strengthen the case for rate cuts in 2025–2026.
AI momentum pushes semicap higher: Lam Research extends lead
Lam Research has surged 114.8% year-to-date, outperforming the tech sector (XLK) by 92.7%. The stock is trading about 7.2% below its 52-week high, with the sell-side seeing roughly 4.9% further upside. The move reflects persistent AI capex demand across memory and foundry, keeping semiconductor equipment utilization and order books firm. That dynamic continues to funnel flows into growth and quality tech, supporting broader equity risk appetite and keeping volatility contained despite narrow breadth.
Hedge fund interest in AI plumbing remains strong. Bridgewater reportedly committed $37 million to CoreWeave, an AI infrastructure provider, even as the company’s revenue jumped 134% year over year and guidance underwhelmed. The split signal—rapid top-line growth versus softer outlook—captures the market’s late-cycle sensitivity to execution risk in the AI supply chain.
Crypto check: Solana ETFs see first outflow
Solana-focused ETFs posted their first net outflow of about $8.1 million. While SOL rose 3.6% on the session, the token remains roughly 50% below its all-time high. The divergence suggests a more selective risk stance, with traders rotating within digital assets and favoring liquidity, even as spot prices hold firm.
Rates and cash: locking yield as cuts approach
With markets pricing eventual Fed easing into 2026, fixed-rate certificates of deposit are drawing interest as a way to lock current rates. A $100,000 CD could out-earn a high-yield savings account once deposit rates start to drift lower post-cuts, given typical deposit beta lags. For FX, a gradual decline in front-end U.S. yields would generally cap the dollar versus higher-beta and carry-sensitive peers, though the path depends on growth resilience and risk appetite.
Key Points
- Thanksgiving dinner costs seen down ~5% year over year; turkey prices ease, trimming near-term headline inflation pressure.
- Thanksgiving restaurant traffic expected up ~20%, signaling shifting consumer preferences despite easing grocery inflation.
- Fed Beige Book highlights K-shaped spending: high earners deploy capital into AI and equities; lower/middle tiers cut back.
- Lam Research up 114.8% YTD, outperforming tech by 92.7%; trades 7.2% below 52-week high with ~4.9% implied upside.
- Bridgewater commits $37 million to CoreWeave; revenue up 134% YoY but guidance underwhelms, stoking AI execution-risk debate.
- Solana ETFs record first ~$8.1 million outflow; SOL up 3.6% on the day but ~50% below prior peak.
- CDs could out-yield high-yield savings as rate cuts begin into 2026; front-end yield drift would generally temper USD strength.
FX and market reaction
The dollar edged softer as traders marked down near-term inflation worries on softer food costs and a calm Beige Book. G10 FX ranges stayed tight in holiday-thinned liquidity, with high-beta currencies marginally supported and volatility subdued. U.S. yields eased at the front end, while equities saw continued leadership from AI beneficiaries, led by semicap equipment names. The overall tone remains risk-on but narrow, leaving markets vulnerable to negative surprises in guidance or macro data.
Outlook
– Near term: Thin liquidity can amplify moves; watch for post-holiday revisions in rates and FX as positioning normalizes.
– Medium term: If the K-shaped consumer pattern persists, core-services disinflation may be slow, keeping the Fed data-dependent and the dollar range-bound.
– AI trade: Momentum remains strong but sensitive to guidance; any disappointment could widen equity dispersion and lift volatility.
As the holiday week winds down, traders should track early December labor and inflation prints for confirmation that cooling goods prices are feeding through without a sharp growth hit, a balance that will define the dollar’s next leg, risk appetite, and carry trades, BPayNews notes.
FAQ
How could lower Thanksgiving dinner costs affect inflation and the dollar?
Softer holiday food prices can shave the near-term headline inflation impulse. If sustained, that supports slightly lower front-end yields and a softer dollar, especially against higher-beta and carry-friendly currencies. The effect is incremental and depends on how services inflation evolves.
Why is Lam Research outperforming the broader tech sector?
Lam benefits from the AI capex cycle, which is driving strong demand for semiconductor equipment across memory and foundry. Robust orders and utilization support earnings momentum, helping LRCX outperform broader tech despite valuation sensitivity to guidance.
What does the Beige Book say about the consumer and Fed policy?
It points to uneven, K-shaped spending—high earners keep spending and investing, while lower and middle-income households retrench. That mix complicates the Fed’s job, keeping cuts on the table for 2025–2026 but dependent on incoming data.
Are CDs more attractive than high-yield savings as cuts approach?
Fixed-rate CDs can lock current yields, potentially out-earning high-yield savings once banks lower deposit rates during a cutting cycle. The trade-off is liquidity—CDs tie up funds until maturity, while savings accounts remain flexible.
What do Solana ETF outflows signal for crypto markets?
The outflow suggests more selective risk-taking, with investors rotating within digital assets or de-risking after gains. Price resilience alongside outflows points to a split market: traders active in spot while fund investors turn cautious.
Last updated on November 27th, 2025 at 04:42 pm
