US Stocks Post Colossal U-Turn in Sign That Speculative Spirits Are Weakening: Nov. 20, 2025

US markets rallied Thursday morning after a spectacular earnings report from Nvidia that was followed by a modest uptick in the unemployment rate, developments that strengthened confidence of an augmented runway for AI alongside labor data that bolstered the chances of the Fed cutting next month. However, stocks fell deep into the red in colossal U-turn fashion following a climb of 2% in earlier trading. The morning surge brought the S&P 500 significantly above its closely watched 5- and 50-day moving averages as bulls and bears wrestled over the idea of the technology sector being in a bubble or not, even as CEO Jensen Huang attempted to dismiss concerns of excessiveness. Valuation hawks pulled an interception intraday, though, in a dramatic NFL style swing.

Fixed-Income Reaction

Nevertheless, fixed-income held on to most of its gains as Treasury traders focused on a loftier-than-expected level of joblessness rather than the headline number posting a huge beat amounting to more than double the consensus estimate of 50k job additions. Yields sank despite separate initial claim numbers pointing to stability characterized by layoffs trending south, as that strength was offset by a four-year high in continuing filings, which is indicative of the ongoing light-hire low-fire environment. The descent across the curve was more pronounced by duration, as the maturity structure declined in a bull-flattening manner.

Dollar and Volatility Protection Catch Bids

The greenback advanced marginally, taking its cue from firmer relative growth prospects which outweigh the narrowing of central bank projection differentials, but commodities and crypto suffered heavy losses. Bitcoin hit its lowest point since late April, adding to evidence that speculative spirits are nearly drained. Volatility protection instruments caught bids, rebounding ferociously as investors scrambled to hedge exposures against the backdrop of defensive positioning; forecast contracts also saw interest as a way to avoid turbulent action in share prices.

Investors Dismiss Tailwinds of AI and Fed Outlook

A morning that appeared to be a perfect for equity bulls turned into a nightmare as the S&P 500 took out its 5% drawdown level from its peak. Earlier trading, however, saw the benchmark march above critical moving averages, including the 5- and 50-days, as a 2% up day sank to worse than a 1% down session. What made the opening bell so terrific is that Nvidia’s buoyancy was paired with an ideal blend of employment data that strengthened growth prospects at the headline while bolstering Fed easing expectations in light of a rising unemployment rate; it climbed to a 47-month high. The disappointing technical action occurred during a favorable calendar environment for the market, as the months of November and December typically generate glass-half full perspectives amongst investors rather than pessimism concerning valuations. But what could be happening is a case of back-loaded seasonality, as the strong gains in this year’s traditionally weaker periods of September and October are paying the piper in the present.

International Roundup

China’s Central Bank Maintains Key Interest rates

China’s central bank decided to maintain its key lending rates. The decision means the one-year and five-year loan prime rates of 3% and 3.5% will continue for the sixth-consecutive month. The decision was broadly anticipated by economists. China’s economy has been burdened by excess manufacturing capacity, weakening domestic consumption and a glut of residential real estate. In the third quarter, the world’s second largest economy grew 4.8%, slowing from the 5.2% rate in the prior three period. China last trimmed its rates in May, with 10 bps reductions.

Hong Kong Inflation Strengthens Slightly

Price pressure in Hong Kong accelerated marginally in October with the Consumer Price Index up 0.3% month-over-month (m/m) and 1.2% year over year (y/y) compared to 0.10% and 1.10% in the preceding month, according to the Census and Statistics Department.

The following categories and the extent of the increases had the largest impact on the y/y result of the index:

• Transportation, 3.1%
• Alcoholic drinks and tobacco, 2.0%)
• Miscellaneous services, 2.0%
• Housing, 1.6%
• Miscellaneous goods, 1.3%
• Meals out and takeaway food, 1.3%
• Basic food, 0.1%

Conversely, prices slipped 4.7% and 3.3% in the clothing and footwear group and the durable goods category. The electricity, gas and water followed, dropping 0.3%.

Canada Producer Price Gains Accelerate

Industrial goods producers in Canada increased their prices for the fifth consecutive month in October with the Industrial Product Price Index (IPPI) jumping 1.5% m/m and 6% y/y. Both metrics were higher than the 1% and 5.7% m//m and y/y results in September. Among input costs, unrefined supplies were up 1.6% m/m and 5.8% y/y, according to the Raw Materials Price Index (RMPI). This marked a deceleration from the 1.7% and 8.4% gains in September.

Regarding m/m changes for manufactured products, energy and petroleum stickers softened, partially offsetting the impact of non-ferrous metal products soaring 9.8%, the largest increase since January 2010. Within this category, copper was up 8.7% on fears that a series of global production disruptions would limit supply. Lumber was also 4.3% higher with US companies snatching up the material prior the start of US import taxes on Oct. 14. Regarding input items, the gold, silver, and platinum group, metal ores and concentrates climbed 13.8% m/m, the largest hike since August 2020. Crude oil, however, was down 4.3% after OPEC+ announced a production increase.

Consumer Confidence in Europe Muddles Along

 A key gauge of consumer confidence for the euro area remained below its long-term average with an unchanged reading for this month. The preliminary European Commission’s Consumer Confidence Index remained at -14.2 for the month, slightly worse than the -14 forecast by a consensus of economists.