Executive Summary
- The return of volatility reveals strength in equities, not weakness
- White House issues executive order “Launching the Genesis Mission”
- Precious metals continue historic pace as silver breaks out to new high
- Crude oil declined for fourth consecutive month nearing four-year low
- Sector rotation benefits healthcare, regional banks, homebuilders and transports
November was a volatile month for U.S. equities with the S&P 500 declining 5.7% from its October high, measuring its largest retracement since April. However, the flagship index rebounded sharply into the month-end, eked out a modest 0.2% gain, and extended its winning streak to seven months. In a sign of broadening strength, the S&P Midcap 400 and S&P 500 equal weight indices outperformed with gains of 2% and 1.9%, respectively. The Nasdaq 100 underperformed and broke its seven-month streak of gains driven by profit taking within the high-flying technology sector.
The month’s key themes revolved around shifting expectations for Federal Reserve policy, intensifying scrutiny of AI-related spending, technical-driven volatility, and a White House press release announcing a national initiative to accelerate scientific discovery through AI. Early hawkish commentary and October FOMC minutes pushed December rate-cut odds below 30%, but dovish remarks later in the month reversed sentiment, lifting odds above 80% by month-end. The technology space experienced a relatively modest correction as investors reassessed valuations in AI-related infrastructure following an extended period of strong performance. This recalibration reflects healthy market dynamics rather than structural weakness, as long-term fundamentals for AI adoption remain intact. Technical factors such as crowded momentum trades and liquidity deterioration amplified volatility, driving sharp rotations into previously underperforming industries like healthcare, homebuilders, airlines, regional banks, and transports.
On Nov. 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 drive breakthroughs in critical areas such as advanced manufacturing, biotechnology, energy, semiconductors, and quantum science. The program aims to strengthen U.S. technological leadership, enhance national security, boost productivity, and foster public-private partnerships, positioning America at the forefront of global AI innovation.
Amid these crosscurrents, the fundamental backdrop remained supportive. Q3 earnings growth came in at approximately 13.5%, well above expectations, with an 83% beat rate. AI demand continues to show strength. Overall, while November featured significant swings and thematic volatility, the bullish narrative of solid earnings, favorable seasonality, and strong macro conditions largely stayed intact.
Sector Performance
Large-cap sector performance was highly uneven, albeit eight of 11 groups finished higher. Technology (-4.3%) led declines amid heightened scrutiny of AI spending, momentum unwinds, and profit taking; however, the sector remains nearly 70% above its April low. Healthcare (+9.3%) was the standout sector with its best monthly performance in three years while reaching new all-time highs. The monthly MACD indicator (measure of momentum; lower panel) for the S&P 500 Healthcare Index registered a bullish cross signaling a positive trend change in its long-term momentum.
In similar fashion, small caps were led by Healthcare (+9.9%) while Technology (-7.8%) deeply underperformed. Seven of eleven small cap sectors were higher in November.
Rates, Oil, Bitcoin, and the Dollar
Treasuries were higher for the fourth consecutive month, and the curve steepened as the 2yr yield fell 8bps to 3.49% and the 10yr declined 7 basis points to 4.01%.
WTI crude declined 4% to $58.55 in November, its fourth consecutive monthly decline. The softening price is due in part to too much supply chasing modest demand, along with easing geopolitical risk from Russia-Ukraine peace talk speculation. WTI now stands roughly 4% from its April low, $55.12, which represents a critical support level.
Following a 2% rally in October, the greenback ran into a wall of technical resistance in the $99.58 – $100.82 range which previously represented a support zone from early 2023 through mid-2025 (“prior support, now resistance”). This resistance is reinforced by the declining 40-week simple moving average, sma (synonymous to the 200-day sma).
Precious metals continued their historic run with gold and silver rising 5.9% and 16%, respectively. For 2025, gold and silver have risen +62% and +96%, respectively, their best annual return since 1979.
Bitcoin declined 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, leading to significant technical damage in the charts. In early November, bitcoin knifed below its 200-d sma and soon afterwards experienced a death cross where its 50-d sma crossed down below its 200-d sma. Despite rebounding more than 12% off the November low, there has been a meaningful shift in momentum visible in the monthly MACD (measure of momentum, lower panel) which made a bearish cross over its signal line. Given its 715% gain over the prior three years to its high in October, the current period of corrective price action could last longer than many anticipate.
Looking Ahead
Despite the recent rise in volatility and corrective price action, there are reasons for optimism over the near term. The recovery off the November lows was broad based and accompanied by a healthy rotation into the previously underperforming healthcare, energy, materials, transports, 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 into year-end with December historically ranking in the top quartile of performance on average. While a December rate cut is widely anticipated, Chair Powell’s guidance on the trajectory of cuts in 2026 will be critical for sustaining momentum.
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