November’s Market Signals and What They Mean Now

U.S. markets appeared steady in November, but the underlying story proved more layered. Major indices hovered near record levels for much of the month before momentum faded. AI-driven enthusiasm met earnings reality, Federal Reserve messaging reshaped expectations, and the government shutdown limited the flow of economic data.

How Major Indices Moved

Market performance reflected shifting expectations around Fed policy and notable rotation within AI and mega-cap tech. The S&P 500 edged up 0.13%, while the Nasdaq 100 declined 1.64%. The Dow added 0.32%. Renewed optimism for easier policy supported late-month gains, though profit-taking in stretched tech names kept a lid on overall performance.

Policy Signals in a Low-Data Month

The 43-day federal shutdown removed October CPI entirely and pushed payrolls into December, leaving investors and policymakers without clarity on inflation and labor trends. In this environment, Fed commentary carried more weight than usual. Officials offered differing perspectives: some suggested policy was nearing neutral, while others supported another quarter-point cut in December, citing cooling inflation and labor conditions. Meanwhile, FOMC minutes highlighted a divide on whether the October cut had gone too far.

Labor and Inflation Uncertainty

With no October survey collected, markets head into December waiting on combined October and November payrolls and an updated unemployment rate. On inflation, competing forces shaped the outlook. AI investment is supporting productivity, while tariff and immigration shifts could tighten labor and goods markets. Cleveland Fed President Loretta Mester noted that inflation had edged higher again and warned that policy may now exert “less downward pressure” on prices.

Housing’s Regional Divide

Existing-home sales held at a 4.1 million annual pace in October, and the median price reached $415,200. While national price growth showed modest year-over-year gains, regional trends varied sharply. Strength in Connecticut and New Jersey stood in contrast to declines in Florida and D.C. Sellers increasingly responded to softening conditions with higher delisting rates and widespread price cuts. Forecasts point to gradual improvement through 2026, though current conditions favor buyers amid longer listing times and tighter inventory.

Looking Ahead

November’s combination of mixed signals and limited data offers useful guideposts. The Fed is easing, but with divided views and incomplete information, aggressive assumptions remain premature. AI and mega-cap tech continue to influence profit trends, though recent volatility highlights the importance of selectivity. Key updates in December — including the Fed’s rate decision and AI sector progress reports — will serve as important markers heading into year-end.

As always, staying balanced and focused on long-term goals remains essential. For personalized guidance and support, we encourage you to reach out to our financial team.