executive Summary
- Return of volatility shows strength in equities, not weakness
- White House issues executive order “Launch of Genesis Mission”
- Precious metals continue their historic rise as silver reaches new highs
- Crude oil fell for the fourth consecutive month and reached its lowest level in four years
- Sector rotation benefits healthcare, regional banks, homebuilders and transportation
November was a volatile month for US equities, with the S&P 500 falling 5.7% from its October high, its biggest retracement since April. However, the major index made a sharp comeback at the end of the month, gaining a modest 0.2% and extending its winning streak to seven months. In a sign of growing strength, the S&P Midcap 400 and S&P 500 equal weight indices outperformed, gaining 2% and 1.9%, respectively. The Nasdaq 100 underperformed and snapped its seven-month run of gains driven by profit-booking in the high-flying technology sector.
The main themes of the month revolved around changes in expectations for Federal Reserve policy, intense scrutiny of AI-related spending, tech-driven volatility, and a White House press release announcing a national initiative to accelerate scientific discovery through AI. Initial hawkish remarks and the October FOMC minutes pushed the probability of a rate cut below 30% in December, but softer comments at the end of the month reversed sentiment, raising the probability above 80% by month’s end. The technology sector experienced a relatively modest recovery as investors reassessed valuations in AI-related infrastructure after an extended period of strong performance. This recalibration reflects healthy market dynamics rather than structural weakness, as the long-term fundamentals for AI adoption remain intact. Technical factors such as crowded trading and declining liquidity increased volatility, leading to sharp reversals in already poorly performing industries such as healthcare, homebuilders, airlines, regional banks and transportation.
On November 24, 2025, the White House issued an executive order, “Launching the Genesis Mission”, announcing a large-scale national initiative to accelerate scientific discovery through artificial intelligence (AI). Led by the Department of Energy, it will create an integrated AI platform – the American Science and Security Platform – combining high-performance computing, secure datasets and AI foundation models to automate research and advance breakthroughs in critical areas such as advanced manufacturing, biotechnology, energy, semiconductors and quantum science. The program aims to strengthen US technological leadership, enhance national security, boost productivity, and foster public-private partnerships, putting the US at the forefront of global AI innovation.
Amidst these undercurrents, the basic background remained supportive. Third-quarter earnings growth came in at nearly 13.5%, far exceeding expectations, with a beat rate of 83%. The demand for AI is continuously showing strength. Overall, while November saw significant volatility and thematic volatility, the bullish story of solid earnings, favorable seasonality and strong macro conditions remained largely intact.
sector performance
The performance of the large-cap sector was extremely uneven, although eight of the 11 groups finished higher. Technology (-4.3%) declined amid increased scrutiny of AI spending, slowing momentum and profit taking; However, the sector remains up about 70% from its April low. Healthcare (+9.3%) was the standout sector reaching new all-time high with its best monthly performance in three years. The monthly MACD indicator (a measure of momentum; bottom panel) for the S&P 500 Healthcare Index registered a bullish cross indicating a positive trend change in its long-term momentum.
Similarly, small caps were led by Healthcare (+9.9%), while Technology (-7.8%) performed significantly worse. Seven out of eleven small cap sectors were higher in November.
Rates, Oil, Bitcoin and Dollar
Treasuries were higher for the fourth consecutive month with the 2-year yield falling 8 basis points to 3.49% and the 10-year yield falling 7 basis points to 4.01%.
WTI crude fell 4% to $58.55 in November, its fourth consecutive monthly decline. The price softening is partly due to excess supply following modest demand as well as reduced geopolitical risk appetite from speculation over Russia-Ukraine peace talks. WTI is now about 4% off its April low, $55.12, which represents an important support level.
After a 2% rally in October, the greenback hit a wall of technical resistance in the $99.58 – $100.82 range, which previously represented a support zone from early 2023 to mid-2025 (“previously support, now resistance”). This resistance is reinforced by the descending 40-week simple moving average, SMA (synonymous with the 200-day SMA).
Precious metals continued their historic run with gold and silver rising 5.9% and 16% respectively. In 2025, gold and silver are projected to rise by +62% and +96% respectively, their best annual returns since 1979.
Bitcoin fell 16.7% in November, erasing earlier gains and closing the month 3% lower YTD. At the intra-month low (80,554), Bitcoin was down more than 36% from its October high, causing significant technical damage in the charts. In early November, Bitcoin dropped below its 200-D SMA and shortly thereafter experienced a death cross where its 50-D SMA dropped below its 200-D SMA. Despite a bounce of more than 12% from the November low, there has been a meaningful change in momentum as seen in the monthly MACD (measurement of momentum, bottom panel), which has formed a bearish cross on its signal line. Given a 715% increase over the past three years from its peak in October, the current period of corrective price action may last longer than many anticipate.
looking ahead
Despite the recent increase in volatility and corrective price action, there are reasons for optimism in the near term. The recovery from November’s lows was broad and included a healthy rotation into previously underperforming healthcare, energy, materials, transportation, homebuilders and regional banks. Market breadth is solid, as evidenced by the S&P 500 Equal Weight Index and the Small Cap Russell 2000 Index, which are within 1% and 2%, respectively, of new all-time highs. Energy prices and rates are near multi-year lows, which bodes well for consumers. Seasonal trends also favor equities at year-end and December has historically ranked on average in the top quartile of performance. While a rate cut in December is widely expected, Chair Powell’s guidance on the trajectory of cuts in 2026 will be important to maintain momentum.
The information contained herein is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice on behalf of any particular security or overall investment strategy. All information contained herein is obtained by Nasdaq from sources that Nasdaq believes to be accurate and reliable. However, all information is provided “as is” without warranty of any kind. Consultation with security professionals is strongly recommended.
