Finding a Bit of Balance Before the Holiday Break
As we head into Thanksgiving, markets seem to be doing what many of us are doing this week, trying to settle down before the long weekend. After a strong run through the fall, last week brought a modest pullback across major U.S. indexes as investors refocused on two ongoing themes: AI valuations and a slow drip of delayed economic data finally making its way out of Washington.
The declines, roughly 2% across the S&P 500, Nasdaq, and Dow, felt less like a shift in direction and more like markets catching their breath after a stretch of enthusiastic gains. It was the kind of movement that reminds us that even in strong environments, momentum doesn’t run in a straight line.
AI Stocks Take a Breather
AI names led the early-week softness, as investors waited for a pair of closely watched earnings reports. One Megacap, Nvidia, disappointed expectations and briefly pulled markets lower, but midweek earnings beat from another heavyweight helped spark a quick rebound before sentiment cooled again.
If anything, the stop-and-start reaction underscores how central AI has become to this year’s narrative. It also shows how sensitive investors are to valuations after such a remarkable run. None of this changes the long-term story, but it does highlight the value of staying diversified while excitement and uncertainty navigate the same lane.
Finally, Some Economic Data, And a Labor Market That’s Still Normalizing
The September jobs report, delayed by the government shutdown, finally arrived with 119,000 new jobs, the strongest reading since April. At the same time, the unemployment rate rose to 4.4%, the highest in four years.
It’s a mixed picture, but a broadly logical one. Hiring is slowing, the labor market is cooling in a manageable way, and the Fed now has a bit more room to consider a December rate adjustment. Comments from New York Fed President John Williams helped reinforce that possibility and provided some late-week support for markets.
Europe: Progress, Potential, and the Usual Caveats
European equities continue their pattern of showing real promise before handing the lead back to the U.S. Activity surveys reached their highest levels since 2023, and valuations remain appealing across almost every sector. But structural challenges, market fragmentation, heavy regulation, and cautious household savings habits, still limit how fast momentum can build.
Even so, selective opportunities remain compelling, particularly in healthcare, financials, and utilities. Longer term, increased defense spending and accelerating AI adoption could add meaningful lift.
Looking Ahead With a Clearer Lens
Last week’s volatility serves as a good reminder: even strong markets experience pauses, especially when a handful of themes carry so much weight. Stepping back, the foundations remain supportive—cooling inflation, stabilizing yields, resilient consumer spending, and ongoing innovation.
As we head into Thanksgiving, we’re reminded that perspective often comes from simply stepping back, a lesson useful in both markets and holiday gatherings. We’re grateful for your trust and partnership, and we look forward to closing out the year with clarity, purpose, and continued optimism.
Wishing you a warm and restful holiday.
WRITTEN BY:
David Stevens
A Calm Moment in a Busy Market Season
Finding a Bit of Balance Before the Holiday Break
As we head into Thanksgiving, markets seem to be doing what many of us are doing this week, trying to settle down before the long weekend. After a strong run through the fall, last week brought a modest pullback across major U.S. indexes as investors refocused on two ongoing themes: AI valuations and a slow drip of delayed economic data finally making its way out of Washington.
The declines, roughly 2% across the S&P 500, Nasdaq, and Dow, felt less like a shift in direction and more like markets catching their breath after a stretch of enthusiastic gains. It was the kind of movement that reminds us that even in strong environments, momentum doesn’t run in a straight line.
AI Stocks Take a Breather
AI names led the early-week softness, as investors waited for a pair of closely watched earnings reports. One Megacap, Nvidia, disappointed expectations and briefly pulled markets lower, but midweek earnings beat from another heavyweight helped spark a quick rebound before sentiment cooled again.
If anything, the stop-and-start reaction underscores how central AI has become to this year’s narrative. It also shows how sensitive investors are to valuations after such a remarkable run. None of this changes the long-term story, but it does highlight the value of staying diversified while excitement and uncertainty navigate the same lane.
Finally, Some Economic Data, And a Labor Market That’s Still Normalizing
The September jobs report, delayed by the government shutdown, finally arrived with 119,000 new jobs, the strongest reading since April. At the same time, the unemployment rate rose to 4.4%, the highest in four years.
It’s a mixed picture, but a broadly logical one. Hiring is slowing, the labor market is cooling in a manageable way, and the Fed now has a bit more room to consider a December rate adjustment. Comments from New York Fed President John Williams helped reinforce that possibility and provided some late-week support for markets.
Europe: Progress, Potential, and the Usual Caveats
European equities continue their pattern of showing real promise before handing the lead back to the U.S. Activity surveys reached their highest levels since 2023, and valuations remain appealing across almost every sector. But structural challenges, market fragmentation, heavy regulation, and cautious household savings habits, still limit how fast momentum can build.
Even so, selective opportunities remain compelling, particularly in healthcare, financials, and utilities. Longer term, increased defense spending and accelerating AI adoption could add meaningful lift.
Looking Ahead With a Clearer Lens
Last week’s volatility serves as a good reminder: even strong markets experience pauses, especially when a handful of themes carry so much weight. Stepping back, the foundations remain supportive—cooling inflation, stabilizing yields, resilient consumer spending, and ongoing innovation.
As we head into Thanksgiving, we’re reminded that perspective often comes from simply stepping back, a lesson useful in both markets and holiday gatherings. We’re grateful for your trust and partnership, and we look forward to closing out the year with clarity, purpose, and continued optimism.
Wishing you a warm and restful holiday.
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