November By The Numbers, December's Signs And Beyond
By: Charley Blaine
The Street
Out of nowhere, on a holiday week no less, the stock market went big and bold. The results were weekly gains for all three major indices, and monthly wins for both the Dow and S&P 500.
The week's positive finish now raises three questions:
- Can the stock market continue its bullish run?
- What's the outlook for December?
- Can we start to hazard a guess about 2026?
Theoretically, the run can continue this coming week and maybe into the next when the Federal Reserve meets to discuss interest rates and the economy. The consensus (if the CME Group's FedWatch tool is an indicator) is a rate cut is probable.
We say this for two reasons:
John Williams, a key Fed official (because he's president of the New York Federal Reserve Bank), said the risks of an economic slowdown were bigger than more inflation. So, interest rate could come down.
Moreover, the S&P 500 (and the markets generally) has just enjoyed five straight gains and ended Friday only 1% below its 6,920 all-time high reached on Oct. 29.
We should add the rally was basically prompted by Williams' November 21st speech.
As a result, something would have to derail the market. It would have to be an event: A shock runup in bond yields or oil prices, a terrorism attack, explosion in the Middle East or Ukraine, a sudden resignation no one expects.
Looking ahead to end-of-year
Could that mean the market could rally through to December as well? Maybe. There are only 22 trading days left in 2025. So, again, you need an abrupt, serious problem.
The market's recent pullback was set off by worries that Big Tech names like Meta, Alphabet, Tesla and Oracle were investing too much money on artificial intelligence capacity. That is, huge data centers filled with racks of computers tied together with AI chips.
That worry is probably still on many investors' minds, but you won't likely see it erupt again until the latter half of January when fourth-quarter earnings reports start.
This is not to deny the attention the recent market pullback received. Through Nov. 20, the S&P 500 had fallen 5.5% and the Nasdaq Composite was down more than 8% after hitting all-time highs on Oct. 29. The Dow Jones Industrial Average fell 5.5% from its all-time high, reached on Nov. 12. The pullback was a surprise, and it actually did need a catalyst to calm investors.
The catalyst was John Williams' speech.
His speech puts a floor under the market for now. And we wait for the Fed's big event.
How November ended
November, normally one of the better months of the year, closed flat to modestly lower. Nvidia was down 12.6%. Microsoft dropped 5% while Alphabet jumped almost 14%.
The S&P 500 and Dow were basically flat. The Nasdaq and Nasdaq-100 Index each fell about 1.5%.
Three interesting exceptions: Walmart jumped 9.2% in November. Berkshire Hathaway rose 7.6% as Warren Buffett prepares to step down as CEO at the end of the month. Costco Wholesale was up slightly, thanks to a 3.1% gain starting after Monday.
And interest rates mostly moved lower anticipating the Fed's Dec. 10 decision. The 10-year Treasury bond was yielding about 4% on Friday, down from 4.6% when 2025 opened. The 30-year mortgage rate is just above 6.2%, down from 7.25% in January.
Here's where the major indices stand after 11 months:
- The S&P 500 finished Friday up 16.45% for the year.
- The Nasdaq is up 21% for 2025.
- The Dow industrials are up 12.2%.
- The Russell 2000 Index is up 12.1%.
The Magnificent Seven stocks dominate
Part of the unease about the markets in recent weeks has much to do with how the gains have been built.
Consider the S&P 500. About 49% of its 38.6% total return since the market bottom in April 2025 (stock price gain plus dividends) came just from the Magnificent Seven stocks: Apple, Alphabet, Amazon.com, Meta Platforms, Microsoft, Nvidia and Tesla, according to S&P Senior Index analyst Howard Silverblatt.
When asked, Silverblatt said he didn't believe the S&P 500's total return in any period was so dominated by such a small group of stocks.
For the year to date, the index is up 17.8% on a total return basis. Without the Mag Seven stocks, the total return falls to 10.24%.
