US Equities Fall for Fourth Consecutive Session: Nov. 18, 2025

Stocks are declined for the fourth-consecutive day on Tuesday as Wall Street adopts a risk-off posture in light of valuation worries, household spending anxiety, employment angst and elevated inflation that is keeping the US Fed at bay and increasingly preventing it from to coming to the rescue. Investors appeared to be bailing out of the market prior to Wednesday earnings report from Nvidia, as analysts waited for critical updates on the trajectory of AI to either justify or quell the significant capital appreciation and enthusiasm in the space. Meanwhile, this week features profitability results from retailers too, and an update from Home Depot before Tuesday’s opening bell was awful, as the company signaled that prospective customers continue to maintain a “deferral mindset” rather than going forward with projects now, pointing to a heightened probability of consumers being on their last legs.  Furthermore, labor data released on Tuesday from ADP and the DOL failed to inspire confidence of a reaccelerating cycle, with the former describing continued job trimming, while the latter noted a modest increase in layoffs. Homebuilder sentiment beat to the upside, but remained deep in contraction territory and its narrow nature wasn’t nearly enough of a motivator to energize bulls.

Market Reaction

Equities moved well of their morning lows although were still down amidst positive sector breadth; 8 of the 11 major categories are in the green. Safe-haven assets rallied as traders clamored for Treasuries, gold, silver, the greenback and volatility protection instruments. Fixed income also received an assist from Fed Governor Christopher Waller stating that he thinks the central bank should cut in December, standing in contrast with most of his colleagues preferring a pause, excluding Bowman and Miran. The yield curve descended in bull-steepening fashion as a result, led south by the monetary policy sensitive shorter tenors, as the chance of a reduction next month rises to 48%, approaching the coin-flip level once again. Crude oil gained on supply concerns stemming from Washington’s sanctions on Moscow; however, natural gas, copper and lumber fell.

Private-Sector Payrolls Contract

The private sector lost an average of 2,500 jobs each week during the 28 days ended Nov. 1. The result was better than the 11,250 reported last week and could be signaling a short-term trough in employment conditions. Unemployment claims from the Department of Labor (DOL) additionally pointed to somewhat of an alleviation for payrolls, with the 232,000 initial and 1.957 million continuing figures for the period ending Oct. 18 falling in the upper end of the relative safe zone.

Homebuilder Sentiment Climbs from Five-Month High

Homebuilder sentiment for November reached a six-month high, ascending one point to 38, according to the Tuesday release of the National Association of Home Builders (NAHB) and Wells Fargo Housing Market Index. The latest gain surpassed the economist consensus expectation for an unchanged score. The gauge is based on a scale of 0 to 100 with a reading greater than 50 implying that the majority of single-family house builders is confident about the market. For the most recent print, current sales conditions and traffic of prospective buyers climbed from 39 and 25 to 41 and 26. Conversely, sales expectations for the coming six months slipped three points to 51.

Additionally, a post-Covid 19 record-high of 41% of builders said they have cut prices with the average reduction at 6%, unchanged from October. More broadly, 65% of builders said they offered sales incentive, matching the rates of the past two months. From a regional perspective, sentiment climbed from 31 and 35 to 33 and 37 in the West and South but sank from 42 and 55 to 40 and 45 in the Midwest and Northeast.

Keeping Long-Term Equity Gains in Perspective

The economic cycle during the past two years has increasingly featured affluent consumers bolstering overall expenditure trends while the middle- and lower-income cohorts have pared back discretionary activities. The bifurcated results are influenced by the fact that the former group has benefited disproportionately from extraordinary asset price appreciation in housing and in capital markets, while the latter is more affected by labor conditions and wage growth, segments that have performed well but haven’t experienced comparable strength. Average-income households have been pressured by elevated inflation, lofty borrowing costs and reduced job vacancies, however, the expansion has powered on because the aggregate performance has been robust. In the midst of the fourth quarter now, on the heels of an agreement to end the longest government shutdown in history and equities at risk of a valuation readjustment, the economy is vulnerable in the short term to slowing consumption from wealthier folks. Following the adverse impact of Washington’s closure, which is likely to bring GDP to a one-handle to finish the year, the potential that individuals look at their investment portfolios to justify spending behaviors could be a theme to watch in the next several weeks. Still, it’s important to note that despite the weakness of the last few days, the S&P 500 has appreciated double-digits in 2025 and a potential blockbuster Nvidia report alongside a cool but not ice-cold nonfarm payrolls report later this week could absolutely power a Santa Claus rally to new highs.

International Roundup

Hong Kong Unemployment Rate Drops

Hong Kong’s unemployment rate fell 0.1 percentage point from the three-month period ended in September to 3.8% as of the August through October timeframe, according to the Census and Statistics Department. The ranks of the idle during the two time periods shrank by 6k to 149k but an additional 800 individuals joined the underemployed category, which saw no change in its 1.6% rate.  Meanwhile, the workforce shrank by 7.8K to 3.82 million.

In a press release, Secretary for Labor and Welfare Chris Sun opined that the special administrative region’s economic expansion, strengthening business sentiment and gradual recovery in consumer confidence is likely to support the job market. Hong Kong’s three-month unemployment rate hit a low of 2.8% in late 2023 and then increased, reaching its recent high of 3.9% for the period ended in September. The recent drop in unemployment was fairly broad based with retail, professional and business services, accommodation and food services, foundation and superstructures, and the financing sector all reporting declines in ideal individuals.

Groundbreaking for Residential Real Estate Plunges in Canada

Residential construction in Canada plunged 17% last month relative to September. The seasonally adjusted annualized rate slowed from 279,174 to 232,765, according to the Canada Mortgage and Housing Corporation.