How The Grinch Won’t Steal The Year-End Rally

Market Commentary – November 24, 2025

Last week the markets enjoyed really good news with blowout earnings from Nvidia (NVDA) and an earnings report from Walmart (WMT) that showed consumers are still spending, though they’re being more selective about where they shop.

We also are finally getting badly needed economic data. Last Thursday, the September employment report was released and there was something for the doves on the FOMC (Federal Open Market Committee) – those who want lower interest rates – and something for the hawks – those who want to pause further rate cuts. Despite the good news, the equity markets continued to decline sharply. Then on Friday, John Williams, President of the Federal Reserve Bank of New York (NY Fed), said he sees room for the Fed to lower rates in the near term as the labor market softens; the equity markets liked what they heard and rallied. The NY Fed carries a lot of weight on the FOMC, as a permanent voting member. It’s clear that the equity markets want lower interest rates. But the Fed decision is still weeks away (December 10th). So, let’s take a look at where the equity markets stand.

Holiday Weeks Bring Rallies And This One Starts With Stocks Oversold

Holiday weeks have a bias to rally stocks, and this being Thanksgiving week, we expect the equity markets to find their footing and rally. The S&P 500 is now clearly oversold on the 14-week stochastic – its most oversold reading since April. Price momentum remains positive with the 50-, 100-, and 200-day moving averages still trending higher, but the S&P 500 has not been able to hold the 50-day and is now testing the 100-day at 6544. The S&P 500 is down 5.5% while the Technology-heavy Nasdaq 100 is down 8.0%. The market is trying to find a bottom in equities, so investors should expect continued volatility until it regains its footing. We believe it can still rally and retest the highs near 6900, which keeps our year-end target of 7000 in play. Last week, we released our 2026 Year Ahead Outlook, and we titled it “Be Fearless” because we expect the Bucking Bull to return next year with renewed volatility. Stocks are up nearly 100% since the lows of 2022. Some consolidation should be expected. We are also calling 2026 a reset year. Remember: 2026 is a mid-term election, which historically brings volatility from April through September, followed by a year-end rally. On average, mid-term election years deliver about a 6.0% gain. For next year, we are forecasting S&P 500 at 7,500, with volatility — possibly episodic — resetting markets along the way. (For more information, see our Year Ahead Outlook.)