What Happened?
Shares of online advertising giant Alphabet (NASDAQ:GOOGL) jumped 4.6% in the afternoon session after Reuters reported that the incoming Trump administration plans to eliminate certain car crash reporting requirements for autonomous vehicles. This change could benefit Alphabet's autonomous vehicle division, Waymo, as the market navigates a crucial growth phase.
Separately, stocks soared, led by the Nasdaq, which climbed 1.2%, while the S&P 500 also increased by 0.5% amid continued positive momentum. Investors are bracing for the outcome of the Fed's policy meeting later in the week, with overall sentiment indicating that markets anticipate no major surprises. The consensus expects the Fed to cut rates by 0.25% during its final committee meeting of the year. Recent economic data, including the November 2024 CPI report, continue to support the soft landing narrative—indicating that the Fed can control inflation without harming the economy.
After the initial pop the shares cooled down to $197.57, up 4.1% from previous close.
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What The Market Is Telling Us
Alphabet’s shares are very volatile and have had 21 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 4.9% on the news that the company introduced Gemini 2.0, a significant update to its AI model. Alphabet also introduced Deep Research, a feature that acts like a research assistant capable of advanced reasoning. In a company blog, Alphabet revealed that Gemini 2.0 would be immediately available only to developers and trusted testers. The company is expected to gradually make the update available to more users and include it in products like Gemini and Search.
Alphabet is up 42.9% since the beginning of the year, and at $197.57 per share, has set a new 52-week high. Investors who bought $1,000 worth of Alphabet’s shares 5 years ago would now be looking at an investment worth $2,902.
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