Rockport Market Update – November 2025

Key Takeaways

• Market volatility ramps up

• Inflation still above 3% but signs of improvement coming

• Employment pictures weakening

• Government shut down nears longest on record

Market Review: A Not-So-Spooky October

October turned out to be more treat than trick for investors, as stock prices continued their climb for another month. However, volatility made a noticeable return— 13 out of 22 trading days saw moves of 1% or more, exceeding the combined totals for July, August, and September.

For the month, the S&P 500 Index gained 2.34%, bringing its year-to-date return to 17.52%. In contrast, the S&P 500 Equal Weight Index slipped 0.93%, highlighting the growing divergence between the traditional, market-cap-weighted index and its equal-weight counterpart. This gap underscores how much recent market strength has been driven by just a handful of the largest stocks.

Historically, markets tend to be healthiest when gains are broad-based rather than concentrated. As we move into November, one of the strongest months of the year for equity performance, a broader participation across sectors may be needed to sustain the rally.

Rate of Inflation

Inflation as measured by the CPI came in about on target for October at 3.01%. It appears possible that in the coming months and into 2026 we could see inflation falling towards 2% range. The fall in oil prices in 2025 is working its way into the economy and contributing to inflation staying somewhat in check. This is a good thing for consumers as oil is a key input cost in a lot of products. Interestingly, after another Federal Reserve interest rate cut in October the odds have fallen as of this writing for an additional cut in December from well over 90% to now just 70%.

Employment Weakening as Layoff Announcements Add Up

Throughout this year, we’ve noted signs of a slowing job market and recent announcements suggest that trend is intensifying. Several major companies have unveiled significant layoffs, including:

• UPS: 48,000 positions
• Nestlé: 16,000 positions
• Amazon: 14,000 positions
• Paramount: 2,000 positions
• General Motors: 1,700 positions

This growing list of workforce reductions warrants close attention. If the trend continues, it could begin to weigh more heavily on the broader economy. For now, the greatest risks lie in softening consumer spending and declining confidence, both of which could amplify existing economic headwinds.

Government Shutdown Nears Record Length

As of the end of October, the ongoing government shutdown is rapidly approaching (and likely to become) the longest in history. Beyond the immediate hardships faced by furloughed workers and those impacted by suspended benefit programs, the broader economic consequences are starting to mount.

Recent estimates suggest that GDP growth could decline by as much as 2% for the quarter, as ongoing disruptions dampen both consumer and business spending, leading to a broader loss of confidence. While some of this economic damage may be lasting, much of the lost activity is typically recaptured once the government reopens and delayed spending resumes.

Although this remains a temporary situation, it has clearly contributed to recent market volatility. Policymakers face increasing pressure to resolve their differences and bring stability back to both the economy and financial markets.

 

At the present time, there are a lot of market-moving events and headlines occurring. It’s important to not react to every news story, headline, and event. The big picture, in our view, has not substantially changed. However, portfolio adjustments may be warranted to either reduce risk or catch opportunities in given sectors. You are likely to see some portfolio changes in November.

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Information as of 11.10.25

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