Market Overview
U.S. stock markets experienced a significant rally on November 26, 2025, with technology stocks leading the charge. The S&P 500 achieved its fourth consecutive day of gains, marking a dramatic turnaround from the month’s earlier volatility. Most notably, the index has nearly erased all losses accumulated throughout November, bringing it back to near break-even for the month after nursing a more than 4% decline less than a week prior.
The Nasdaq-100 emerged as the top performer during the session, demonstrating the strength of the technology sector. Bitcoin also participated in the broader rally, though it remained below the $90,000 mark per coin, indicating some caution in risk assets despite the overall positive momentum.
Shifting Risk Sentiment and Technical Recovery
The market’s recovery reflects a significant shift in risk sentiment among investors. Key technical support levels were successfully defended, providing welcome signs of renewed momentum after a period of uncertainty. This turnaround is particularly noteworthy given the sharp decline that preceded it, suggesting that investor confidence has begun to stabilize.
The recovery in small-cap and mid-cap stocks, along with cyclical sectors, reflects renewed optimism about economic prospects. These moves are closely correlated with shifting expectations regarding Federal Reserve rate cuts. Earlier in the week, markets had priced in approximately 90% probability of rate cuts, but this expectation has moderated to less than 40% following recent commentary and economic data releases showing signs of economic softness.
Forward-Looking Economic Expectations
Despite the moderation in rate-cut expectations, market participants are increasingly turning their attention to 2026 and the anticipated economic environment. Several factors are expected to support economic activity in the coming year:
First, fiscal stimulus is anticipated to play a significant role. Expectations include substantial fiscal spending through what market participants refer to as “one big beautiful bill” aimed at supporting both consumers and businesses. This fiscal support, combined with the prospect of lower interest rates compared to current levels, is expected to create a favorable backdrop for economic growth.
Second, earnings fundamentals remain reasonably solid, providing a foundation for equity valuations. The combination of fiscal stimulus, lower rates, and decent earnings is being viewed as a potentially powerful catalyst for economic activity across multiple avenues.
Corporate Earnings and Individual Stock Movements
While the broader market rallied, individual stocks showed mixed results reflecting company-specific developments. JPMorgan Chase saw its shares rise for a second consecutive day, with analysts modestly adjusting their stance to maintain an overweight rating despite a revenue forecast that disappointed investors. The bank’s annual recurring revenues still managed to stand out positively.
Transportation and logistics stocks faced headwinds. Old Dominion Freight Line received a sell rating with a price target indicating a potential 16% decline, as analysts cited diminishing marginal returns due to network traffic comparisons with 2024. Delta Air Lines reported a 5% to 10% reduction in bookings from initial expectations, attributable to recent shutdowns, and the airline indicated it would likely need to adjust fourth-quarter guidance accordingly.
Consumer Spending and Holiday Season Outlook
Fresh data on holiday shopping provided encouraging signs for the retail sector. Record shopping activity is fueling expectations for more than a billion dollars in holiday sales for 2025. Consumer behavior shows interesting patterns, with shoppers becoming more strategic about their spending.
A record 187 million people are expected to shop during the holiday weekend, with 130 million specifically participating in Black Friday shopping alone. This represents strong consumer engagement with the holiday season. However, consumer spending patterns are evolving, with shoppers becoming more careful about where they allocate their dollars, focusing on sales and opportunities to maximize value. This shift reflects consumers’ attempts to stretch their purchasing power in the current economic environment.
Market Implications and Technical Outlook
The four-day rally has positioned markets favorably heading into the final session of the week. With only a half-session remaining on Friday, the momentum established over the past four trading days has substantially improved the technical picture for equities. The successful defense of key support levels and the breadth of the rally across different market segments suggest that the recent selling pressure may have been overdone.
For investors, the combination of improving market technicals, forward-looking fiscal stimulus expectations, and solid consumer engagement with holiday shopping provides a more constructive backdrop than existed just days earlier. The moderation in rate-cut expectations, while reducing some of the appeal of rate-sensitive sectors, has been offset by growing confidence in the economic growth potential from fiscal policy and consumer resilience.