By Pete Biebel, Senior Vice President, Senior Investment Strategist
Print This Post
Oh, well, a-bless my soul, but what’s wrong with stocks? They can’t seem to stand on their own two feet. To say it was a wobbly week for the stock market is an understatement. The market went through a wide range of emotions in a fairly short period of time. From tentative consternation to ebullient elation to stumbling trepidation all in a handful of days.
Things have been getting weird. There have been a number of reasons for investors to have suspicious minds. In my last report (“It Was the Best of Times, It Was the Worst of Times,” 11/3/2025), I pointed out that, while the market averages had been making new highs, the underlying market health had been deteriorating. Both the advance/decline statistics as well as the increasing number of new lows and decreasing new highs, were warning signs. That article also described the exhaustion gaps that vaulted the S&P 500 Index (SPX) to its Fed Day high in late October. Again, last week, declining stocks on the New York Stock Exchange outnumbered gainers by more than two to one. The number of new 52-week highs was the least since May, and the number of new lows was the most since April.
There have been several other signs that the enthusiasm for stocks was approaching excessive optimism despite the deteriorating internals. According to the Financial Industry Regulatory Authority (FINRA), which among its duties tracks activity in brokerage accounts, as of the end of October, FINRA’s measure of margin debt in brokerage accounts hit an all-time high at more than $1.1 trillion, up almost 45% since a year ago. And according to Morningstar, speculative investments in leveraged stock funds have surged to their highest level on record at more than $140 billion.
Last week’s shake, rattle and roll began with a sell-off on Monday. Artificial intelligence (AI), and semiconductor stocks in particular, continued their recent declines. SPX closed below its 50-day moving average for the first time since very early May, ending a run of 138 consecutive sessions above it, the longest such streak in more than 14 years. Early follow-through losses on Tuesday were quickly recovered; the market then went into wait-and-see mode in anticipation of the likely market-moving earnings announcement from NVIDIA Corp. (NVDA) after the close on Wednesday.
On Thursday, the averages had their widest range day since the April Liberation Day volatility. It’s the sort of sudden volatility expansion that occurs once in a blue moon. The market’s darling that day, NVDA, had shown substantial gains in after-hours trading the prior evening following the company’s quarterly report. Initially, shareholders of the company couldn’t help falling in love with the results, but they ended the day in the Heartbreak Hotel. In response to that report, the stock vaulted higher Thursday morning but peaked less than five minutes into the session. The shares hovered for about an hour, holding on to most of the early gain, then slumped into a downtrend that accelerated lower through the morning. Despite nearly a 5% early gain, the stock ended the session near its lows for the day with a loss of about 3%. It was an extremely wild day for NVDA, and that stock’s reversal no doubt was a huge contributor to the reversal in the overall market that day. It was the widest range day for NVDA in at least seven months, but incredibly, 29 other S&P 500 stocks had an even wider range that day.
Of the individual stocks that had significantly larger price swings on Thursday, two, Jacobs Solutions, Inc. (J) and Western Digital Corp. (WDC), had a one-day range of more than 18%. The Thursday range for Robinhood Markets, Inc. (HOOD) was more than 16%. Among the other 15 stocks that had greater than a 10% range that day were nine tech/semiconductor companies, including Seagate Technology Holdings Plc (STX) and Micron Technology, Inc. (MU), each with a range for the day of more than 15%.
Before the market opening on Friday, New York Federal Reserve (Fed) President Williams stated in an interview that he could “see room to ease” at the Fed’s December meeting. Where the odds of a December Fed rate cut were a near certainty a few weeks ago, that probability had declined to just a one-in-three chance as of last Wednesday. Following the Williams comments, those odds quickly doubled to a two-in-three probability. The comment also sparked rallies in stocks and bonds that morning. The early gains were tempered by both another Fed president’s comments and the employment report. Boston Fed President, Susan Collins, was quoted saying that she believes restrictive policy is very appropriate given our economy’s resilience. Her comments followed an employment report that showed an increase in non-farm payrolls in September that was well above consensus, but which also showed the unemployment rate ticking up to 4.4%.
The major averages all gained about 1% on Friday, though the beleaguered Russell 2000 Index of small-cap stocks (RUT) rebounded to a whopping 2.8% that day. SPX ended the week with a net loss of nearly 2%. The NASDAQ Composite Index (COMP) lost 2.74%. On a sector level, three of the 11 S&P sectors managed to score net gains for the week, including two of the more defensive sectors. The rebounding healthcare sector gained nearly 2% for the week and has now added nearly 8% over the past five weeks. The consumer staples sector, which has lagged the market most of this year, squeaked out a gain of almost 1% for the week but is still down about 1% for the year. The technology sector, for the second time in three weeks, was the worst of the 11, falling more than 5% last week.
In recent weeks, I have noted the market’s very rich valuation and described the numerous and potentially significant warning signs that have been popping up. Until last week, there was no reason to make a rush for the exit, though I did suggest that “you might want to talk to your advisor about shifting some of your cap-weighted exposure to a buffered or equal-weight fund. Likewise, you might consider shifting some of your technology and high-beta exposure to more defensive sectors, especially in tax-deferred accounts.”
Last week’s action was the first clear sign that the good times may be fading. Elvis may have left the building. Both SPX and COMP are now below their 50-day moving averages. The next critical level for both indices is the area of their early October lows, levels that both indices tested but held above late last week. I still believe that sustained trading below those levels would strongly suggest that the market has seen an important intermediate-term top. However, the averages are short-term oversold and we’re entering a holiday week and a seasonally bullish period.
Wise men say only fools rush in, but the odds are that we should see some rebound in this shortened week. If, for whatever reason, the market experiences increasing downside momentum after Thanksgiving, then it could be an omen perhaps portending a blue Christmas.
The good news is that, following the government shutdown, the various agencies are in the process of getting their reporting back on schedule. The bad news is that it’s going to take a while. The catchup process gets rolling this week, but many of the economic reports that will be released are just delayed reports on months-old data.
Wishing you and yours a very happy and healthy holiday season.
Thank you. Thank you very much!
| Economic Calendar (11/24/25 – 11/28/25) | Previous | Consensus | |
| Monday 11/24/2025 | No reports scheduled | ||
| Tuesday 11/25/2025 | U.S. Retail Sales (delayed), September, M/M | +0.6% | +0.3% |
| Retail Sales less Autos, September, M/M | +0.7% | +0.3% | |
| Producer Price Index (delayed), September, M/M | -0.1% | +0.3% | |
| PPI less Food & Energy, September, M/M | -0.1% | +0.2% | |
| Core PPI, Y/Y | +2.6% | ||
| S&P Case-Shiller Home Price Index, September, M/M | +0.2% | +0.1% | |
| Business Inventories (delayed), August, M/M | +0.2% | +0.1% | |
| Consumer Confidence, November | 94.6 | 93.4 | |
| Pending Home Sales, October, M/M | 0.0% | 0.1% | |
| Wednesday 11/26/2025 | Initial Jobless Claims, Week of 11/22 | 220K | 225K |
| Durable Goods Orders (delayed), September, M/M | +2.9% | +0.3% | |
| Durable Goods less Transportation (delayed, Sept., M/M | +0.4% | +0.2% | |
| Thursday 11/27/2025 | Thanksgiving Day – Markets Closed | ||
| Friday 11/28/2025 | Chicago Business Barometer, November | 43.8 | NA |
Links to previously published commentaries can be found at benjaminfedwards.com/Latest Investment Insights/Market Commentary/Market