Monday Market Review: November 10, 2025

Weekly Summary

Economic data was again limited due to the federal government shutdown, but included improvements in ISM services and ADP employment, while ISM manufacturing and consumer sentiment fell back to varying degrees.

Equities were largely down around the world, led by a pullback in the technology group. Bonds were flat with little change in Treasury yields. Commodities were also relatively flattish for the week, and oil fell slightly.

 What to know about the markets:

U.S. stocks experienced on off-week, as technology experienced the bulk of the declines, down around -4% (led by down Nvidia, Microsoft, and Salesforce), followed by communications. On the positive side, gains were seen in energy, health care, and financials.

Sentiment turned against technology last week, with signs of skepticism about AI-related company valuations and massive capital spending on those expensive endeavors. While it was one of the biggest pullbacks since April for growth stocks, such retrenchments are far from unusual after strong upward movements in short periods of time. Mid-week, the mood was buoyed a bit by early signs that some U.S. Supreme Court members were skeptical that the administration has the authority to impose tariffs under emergency powers, through IEEPA. This reduces the chances a bit that they’re upheld (a final decision is expected toward year-end or in Jan. 2026). However, the court case is largely based on the status of tariffs as an ‘emergency,’ so even if the tariffs are blocked by the court ultimately, it’s likely other (non-emergency) means would be used in attempts to re-apply them, perhaps ending up with no net change to the outcome. The government shutdown, now into its second month, is assumed to likely trim about a percent off of U.S. GDP for the fourth quarter, with the additional negative news from the FAA that flight traffic would be reduced, which has already begun to negatively affect traveler sentiment. However, missing growth from the shutdown could be made up in first quarter 2026, as postponed payrolls and spending are restarted. Signs of perhaps even weaker labor conditions weighed on sentiment as well.

Foreign stocks were mixed, with flattish results in the U.K., and negative returns in Japan and Europe, and more notably in emerging markets. The Bank of England met, and decided to keep the bank rate at 4%, with a close 5-4 vote, with a minority wanting to cut, but the deciding members wanting more information to ensure inflation was moving in a downward trajectory, and the communication was taken as dovish. In EM, gains in Brazil of several percent offset sharp declines in Taiwan and South Korea—each of which has been closely correlated to the U.S. technology and communications sectors.

Bonds were very flat on the week overall, with minimal change in the U.S. Treasury yield curve. Floating rate bank loans outperformed investment-grade and high yield corporates by a few basis points. Foreign bonds experienced a bit more variation, with emerging market local currency bonds outperforming, as the U.S. dollar fell slightly.

Commodities were flattish on the week, with a small gain in precious metals offset by a decline of over a percent in industrial metals. Crude oil fell about -2% last week to just under $60/barrel, with no major headline news to report, but higher supplies continuing to weigh on prices.

 Our Weekly Economic Notes:

Notes key: (+) positive/encouraging development, (0) neutral/inconclusive/no net effect, (-) negative/discouraging development.

As the U.S. government shutdown continued, missing economic reports included the October employment situation report, as well as construction spending, factory orders, JOLTS, productivity/costs, and a handful of others, including the jobless claims report consolidated from state-level data.

(0/-) The ISM manufacturing index fell by -0.4 of a point to 48.7 in October, below the 49.5 increase expected, and a bit further into contraction, where it’s remained for the past eight months. Two-thirds of industries reported contraction, with one-third showing expansion (the latter of which included metals, food/beverage/tobacco, transportation, plastics, and minerals—several of which were related to stronger commodity prices in those areas). The underlying components were mixed, with new orders up over 49, and employment up to 46. However, production declined several points back into contraction. Prices paid declined by -4 points to a still-expansionary 58 level. Survey respondents continued to mention that tariff-driven cost increases and uncertainty about policy continues to affect their businesses negatively, although the word “tariff” was mentioned less than it was the prior month, if that’s any indication of improvement.

(+) The S&P Global US manufacturing PMI final result for October saw a slight revision up by 0.3 of a point to 52.5, further into expansion. Improvement was seen in output, new orders, and employment, all of which moved further into expansion like the headline figure. Input prices were revised down by a point to 62, which was the lowest level since early in the year.

(+) The ISM services/non-manufacturing index rose by 2.4 points in October back into expansion at 52.4, exceeding the 50.8 expected. Underlying components were strong as well, with gains in business activity and new orders back into expansion, in addition to a small gain in employment to 48, just below the neutral level. Prices paid rose by a fraction of a point to 70, which was strongly expansionary and the highest level in three years. In the respondents’ own words, tariffs were still causing “disruption in contracting,” while the federal government shutdown was mentioned several times, and described as leading to “project delays” and could weigh on 2026 “expectations.” Despite the recent negative mood about those, “business seems to be picking up,” and activity was described as “strong” or “steady.”

(+/0) The S&P Global US services PMI was revised down by -0.4 of a point to 54.8 in the final reading for October. New business and employment each fell but remained in expansionary territory. Input and output prices also fell to their lowest levels in six months, but remained in the mid to upper 50s, showing expansion. Overall, the index remained in a healthy expanding range.

(+) The ADP employment report for October showed a gain of 42k jobs, beyond the 30k expected and reversed the decline of the prior month. The ADP is typically overshadowed by the U.S. government employment situation report, which is not currently available, so secondary sources are all we have to look at. Under the hood, services jobs rose 32k, led by a 47k rise in trade/transportation/utilities and 26k in education/health services. Goods-producing jobs rose 9k, mostly in natural resource/mining.

(-) Another private labor report not often on center stage, The Challenger Report (from Challenger, Gray & Christmas) noted 153k job cuts in October, well up from the 54k in Sep. and the 56k from Oct. 2024. Year-to-date, job cuts for 2025 are the highest in five years, and included the greatest weakness in technology, retail, and general services. As noted by the firm, the pace of cuts “was much higher than average for the month,” with some industries correcting for the hiring boom during the pandemic, as well as “AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes.” Layoffs are seen as being a common precursor to a rise in the unemployment rate, but the connection isn’t perfectly correlated, and based on sector and employer, so it remains to be seen if this is another indicator of weakening labor.

(-) The preliminary Univ. of Michigan index of consumer sentiment for November fell by -3.3 points (-6.2%) to 50.3, below the 53.0 level expected. By segment, current economic conditions fell by -11% (in fact, to the lowest reading in the history of the survey), while expectations for the future fell by nearly -3% on the month. Year-over-year, overall sentiment has fallen by -30%, led by weak future expectations more than present conditions. Inflation expectations for the coming year ticked up by a tenth to 4.7%, while 5-10 year expectations fell by -0.3% to 3.6%. Sponsor commentary highlighted the now month-long federal government shutdown as a primary driver for the poor mood, with consumers “now expressing worries about potential negative consequences for the economy.”

Have a good week.

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Sources: Ryan M. Long, CFA; Director of Investments; FocusPoint Solutions, Inc.

FocusPoint Solutions, American Association for Individual Investors (AAII), Associated Press, Barclays Capital, Bloomberg, Citigroup, Deutsche Bank, FactSet, Financial Times, First Trust, Goldman Sachs, Invesco, JPMorgan Asset Management, Marketfield Asset Management, Morgan Stanley, MSCI, Morningstar, Northern Trust, PIMCO, Standard & Poor’s, StockCharts.com, The Conference Board, Thomson Reuters, T. Rowe Price, U.S. Bureau of Economic Analysis, U.S. Federal Reserve, Wall Street Journal, The Washington Post. Index performance is shown as total return, which includes dividends. Performance for the MSCI-EAFE and MSCI-EM indexes is quoted in U.S. Dollar investor terms.

The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness. All information and opinions expressed are subject to change without notice. Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product. FocusPoint Solutions, Inc. is a registered investment advisor.