Weekly Investment Perspective

Markets finished November on a constructive note: the S&P 500 closed the holiday-shortened Friday session higher and finished the week up roughly 3.7%, while the Dow gained 3.1% and the Nasdaq gained 4.9%, capping a five-day rally that erased most of the month’s earlier drawdown. The S&P ended the day near all-time highs and posted a small monthly gain, while the Nasdaq’s recovery left it with a mixed monthly picture after earlier weakness in some large-cap tech names.

A major undercurrent was rising market conviction that the Federal Reserve will cut rates at its Dec. 9–10 meeting. Futures and research desks pushed the probability of a 25-bp cut into the ~80–88% range by week-end, and several large banks moved their own forecasts earlier to December — a shift that helped risk assets rally and pushed the dollar lower. For bond markets, the 10-year U.S. Treasury yield moved around the 4.0% area during the week as traders re-priced policy and growth expectations.

Sector action was notable for rotation and dispersion: cyclical and small-cap names outperformed during the holiday trading window (Russell 2000 led weekly gains), while pockets of growth, especially some AI-hardware and inflated tech name remained volatile after earlier mid-month pressure. Nvidia and other AI-exposed names saw choppy trading, reflecting a short-term reappraisal of profit-taking versus the longer-term secular thesis around AI adoption. In short: breadth improved during the week, but leadership remains uneven.

On the economic front, the Commerce Department reported that U.S. retail sales increased by 0.2% in September, down from 0.6% in August and below estimates for around a 0.4% increase (the October retail sales data release was delayed due to the federal government shutdown). The September report also showed that excluding auto and gas purchases, sales rose just 0.1% for the month. Black Friday/holiday spending metrics and travel data suggested resilient demand (online Black Friday sales printed strongly), supporting the view that consumption has not yet materially broken. That said, mixed signals persist — labor-market commentary and some regional Fed commentary left questions about whether the Fed will move preemptively or wait for clearer softening in payrolls and wages. Markets are now trading a Fed-policy story alongside real-time data on consumption and corporate guidance.

On the calendar this week are ISM Manufacturing and Service PMI’s and ADP private payrolls. The delayed PCE inflation figures for September and the University of Michigan sentiment read for December are also slated and could move markets if they diverge from expectations.

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