Shutdown Ends but Uncertainty Remains

Performance for Week Ending 11.14.2025:

The Dow Jones Industrial Average (Dow) gained 0.3 percent, the Standard & Poor’s 500 Index (S&P 500) added 0.1 percent, and the Nasdaq Composite Index (Nasdaq) lost 0.7 percent. Sector breadth was mixed with five S&P sector groups closing higher and six closing lower. The healthcare sector (+3.9 percent) was the best performer, while consumer discretionary (-2.7 percent) was the weakest.

*See below for Index Definitions

MARKET OBSERVATIONS: 11.10.2025  – 11.14.2025

The S&P 500 finished the week modestly higher as relief over the end of the 43-day government shutdown was offset by concerns over artificial intelligence (A.I.) related stock valuations and whether the Fed will cut rates in December after recent Fed speakers struck a more cautious tone. The flow of official government data is set to resume in the week ahead, with the Bureau of Labor Statistics saying that the September jobs report will be released this Thursday. However, the fate of October data has yet to be determined. The lack of data coupled with hawkish commentary from several Fed members due to inflation worries has resulted in pared back of rate-cut expectations at next month’s Fed meeting. According to Bloomberg’s World Interest Rate Probability tool, the odds of a rate reduction in December have fallen to just 43 percent from almost 95 percent in mid-October.

Fed Speak—Mostly Cautious: San Francisco Fed President Mary Daly said it’s too soon to decide whether policymakers should lower interest rates when they gather in December but added she is going into the meeting with an open mind. Cleveland Fed President Beth Hammack said that interest rate policy should remain restrictive so it can put downward pressure on still-concerning levels of inflation. St. Louis Fed President Alberto Musalem said officials should move cautiously with further interest rate reductions with inflation running above the central bank’s 2 percent target. Minneapolis Fed President Neel Kashkari said he didn’t support the U.S. central bank’s last interest-rate cut, though he’s still undecided on the best course of action for its December policy meeting. Atlanta Fed President Raphael Bostic said he favors leaving interest rates where they are until there is "clear evidence" that inflation is moving back to the U.S. central bank's 2 percent target. Fed Governor Stephen Miran repeated his view that data showing inflation running above 2 percent is backward-looking and should not be taken at face value and described U.S. monetary policy as too tight mainly because he believes cooling housing inflation is easing price pressures.

Q3 Earnings: As of November 14, 460 members of the S&P 500 have released fiscal third quarter results, with 82 percent beating expectations. Aggregate earnings for this group are up 11.5 percent from a year ago, solidly ahead of the 7.2 percent projected year-over-year growth rate at the start of earnings season. The much-better-than-expected quarterly results have led to an upward revision in expectations, with analysts now expecting 14.7 percent year-over-year growth. On the sector level, the biggest upside surprises came from industrials and healthcare. In terms of year-over-year growth, technology and financials continue to lead the pack.

Economic Roundup: With the reopening of the government, the data blackout should fade in the coming weeks. In the meantime, private market data continued to show a mixed picture. Sentiment among U.S. small businesses eased in October to a six-month low on a deterioration in earnings and less optimism about the economy. On the labor front, U.S. companies shed an average of 11,250 jobs per week in the four weeks ended Oct. 25, according to data released Tuesday by ADP Research. The figures suggest the labor market slowed in the second half of October. Mortgage applications in the U.S. rose last week amid robust purchasing activity, even as rates across all loan types increased, according to the Mortgage Bankers Association. During the period, the average rate for 30-year fixed mortgages rose to 6.34 percent from the previous week's 6.31 percent.

Market View: Despite recent market volatility, we still believe the macroeconomic environment supports further upside through year-end and into 2026. We expect steady economic growth with little chance of a near-term recession, earnings are growing at a solid pace, the Fed is likely to continue to reduce rates, and fiscal policy is expected to become a tailwind in the quarters ahead. Additional supports include oil prices near four-year lows, booming AI capital spending, and favorable seasonal trends in the months ahead. While these things won’t necessarily prevent occasional market pullbacks, collectively they are expected to keep the bull market intact.

The Week Ahead: Following the end of the U.S. government shutdown, the focus will shift to the delayed economic data, most notably the September jobs report, which the Bureau of Labor Statistics indicated will be released on Thursday. In addition, the economic calendar will include the Conference Board’s Leading Index for October, existing home sales from October, and the New York, Philadelphia, and Kansas City regional manufacturing indices. Turning to earnings, the spotlight will be on Nvidia on Wednesday after the close of trading. Other notable companies reporting include tech firm Palo Alto Networks as well as key retailers including Walmart, Home Depot, and Target. It will be a very busy week for Fed speeches with 17 scheduled. The Fed is also slated to release the minutes from the October Fed meeting on Wednesday.

— By Michael Schwager, Chief Market Strategist, Managing Director

Definitions

The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally defined as the leaders in their industry. It has been a widely followed indicator of the stock market since October 1, 1928.

Wilshire 5000 Total Market Index represents the broadest index for the U.S. equity market, measuring the performance of all U.S. equity securities with readily available price data. The index is comprised of virtually every stock that: the firm's headquarters are based in the U.S.; the stock is actively traded on a U.S. exchange; the stock has widely available pricing information (this disqualifies bulletin board, or over-the-counter stocks). The index is market cap weighted, meaning that the firms with the highest market value account for a larger portion of the index.

Standard and Poor's 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Nasdaq Composite Index is a broad-based capitalization-weighted index of stocks in all three Nasdaq tiers: Global Select, Global Market and Capital Market. The index was developed with a base level of 100 as of February 5, 1971.

This material contains opinions of the author, but not necessarily those of Guggenheim Partners, LLC or its subsidiaries. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. No part of this material may be reproduced or referred to in any form, without express written permission of Guggenheim Partners, LLC.