The Major Markets finished lower again last week. The three dominate domestic market indices of the Nasdaq, Dow Jones, and S&P 500 all saw breakdowns through their respective 50-day moving averages. Smaller-cap indexes held up better, generally speaking, with the Russell 2000 and S&P Mid Cap 400 both down less than 1% on the week.

The biggest pressure came from mega-cap growth and the tech sector. The Information Technology sector lost four- and three-quarter percent for the week, while Consumer Discretionary and Energy also lagged. But it wasn’t all red. Investors rotated into more defensive areas. Health care, communication services, and consumer staples all posted weekly gains, offering pockets of strength amid the broader pullback.

The week saw several sharp swings. Monday and Tuesday were dominated by weakness in chipmakers, mega-caps, and concerns surrounding the AI trade. Comments from Fed Vice Chair Philip Jefferson, a voting FOMC Member, also seemed to temper expectations of a December Rate cut when he said:

“The current policy stance is still somewhat restrictive, but we have moved it closer to its neutral level that neither restricts nor stimulates the economy. The evolving balance of risks underscores the need to proceed slowly as we approach the neutral rate.”

By midweek, sentiment improved—briefly—as tech rebounded ahead of NVIDIA’s earnings, but that optimism faded Thursday when the market gave back its early rally despite NVIDIA’s strong report. NVIDIA, despite posting another strong earnings beat, saw its early gains quickly reverse, ending the week down nearly 3%.

Economic data also played a role. Mixed labor reports, a rare delay in key government releases, and shifting Fed expectations contributed to market uncertainty. By Friday, however, comments from New York Fed President John Williams reignited hopes for a December rate cut, sparking a broad rally . The S&P 500, Nasdaq, and Dow all closed near session highs to finish the week.

https://www.federalreserve.gov/newsevents/speech/jefferson20251117a.htm

https://www.wsj.com/economy/central-banking/feds-williams-sees-room-for-near-term-rate-cut-2a470d9c?