November 2025 Market Review & Commentary

We hope that you enjoyed your Thanksgiving holiday. Our family appreciated quality time together, sharing turkey and good company. As we prepare for the upcoming holiday season, we send our warmest wishes for health and happiness to you and those close to you. Just as giving a gift brings joy, November’s markets offered more of a “grinchy” feel than that of joy.

November was a turbulent month for major indexes; the S&P 500 dropped -5.7% from its October high—the biggest decline since the tariff announcements in April. This underperformance was largely due to broad selling and profit-taking in the tech sector, which finished November down -4.3%. Despite this, the S&P 500 managed to bounce back slightly by the end of the month, gaining +0.20%, while the heavily tech-focused Nasdaq ended its seven-month winning streak with a loss of -1.4%.

Key themes included uncertainty about Federal Reserve interest rate decisions, growing questions over AI-related spending, and volatility driven by technical factors.

Federal Reserve Stance: The market’s reaction in November concerned not just potential rate cuts, but also what future Fed decisions would signal. A December cut is viewed positively, suggesting a “soft landing,” where the central bank aims to prevent recession by lowering rates. When odds of a cut dropped, markets reacted negatively as optimism faded. Leaving rates unchanged would mean tighter financial conditions for longer, potentially slowing growth. The late rebound stemmed from renewed hopes for a December cut, boosting clarity and confidence.

AI-Related Spending Questions: Artificial Intelligence continues to influence the market, with seven of the top ten S&P 500 companies connected to AI. In November, investor attitudes shifted from optimism toward more caution due to high valuations and ongoing heavy investment. This led to selloffs in companies like Nvidia and Amazon, at times dropping over -10% and affecting broader indexes. Selectivity among AI stocks is increasing as the cycle evolves and AI remains important for market outlooks.

Technical Driven Volatility: As technology stocks saw a modest correction—especially among AI-focused companies—funds shifted into other sectors. This recalibration benefits market cycles by redirecting investments into previously lagging industries such as healthcare, homebuilders, airlines, and regional banks.

Looking Forward: Although volatility and price corrections have increased, there are near-term reasons for optimism. The broad recovery at November’s end reflected healthy rotation between sectors. Low energy prices and interest rates support consumers, and seasonal trends typically favor markets into year-end. A December rate cut is widely expected.