By Antonio Di Giacomo, Senior Market Analyst at XS.com
The S&P 500 is extending its losses in November and remains near the 6,600-point area, accumulating a decline of more than 4% so far this month. The market is trading with a clearly cautious tone ahead of two key events: Nvidia’s earnings report and the September nonfarm payrolls release, which was delayed due to the government shutdown. After a year of substantial gains supported by enthusiasm around artificial intelligence, investors are beginning to question whether the current valuations of mega-cap tech stocks can be sustained.
Distrust toward big tech has intensified, as some analysts warn that the cycle of massive AI investment may be entering a phase of normalization. Although the sector continues to post earnings growth above the index average, recent volatility suggests a gradual exhaustion of technology indices that had driven market gains for most of 2025. Doubts now center on whether spending on AI infrastructure will maintain its accelerated pace or slow down starting in 2026.
In this context, Nvidia stands out as the key gauge of market sentiment toward AI. The company is expected to report strong year-over-year revenue growth, around 55%, driven by persistent demand for data-center chips. However, investors arefocused on signals regarding the duration of the cycle, capacity constraints, margins, and the impact of restrictions on the export of advanced chips to China. Any hint of
cooling demand or softer order flow could place additional pressure on the tech sector.
Outside the tech realm, the corporate earnings season paints a mixed picture. Home Depot reported earnings below expectations and cut its 2025 guidance, suggesting a more cautious consumer amid housing-market pressures and heightened economic uncertainty. Although the company’s revenue exceeded estimates, its warning for the coming months raised concerns about the strength of durable goods spending.
This week will also be key to assessing the state of U.S. consumer spending, with earnings from Walmart and Target. Both companies face a challenging environment: middle- and lower-income households have been particularly affected by the recent government shutdown, which delayed federal payments and support programs.
Walmart may benefit from its focus on low prices, while Target is aiming to regain sales momentum after several difficult quarters. Year-end guidance will be crucial for gauging consumer sentiment heading into the holiday season.
On the macroeconomic front, the lack of official data following the shutdown has reduced the market’s visibility. The September jobs report, arriving with an unusual delay, will be decisive in determining whether the economic slowdown is continuing or whether the labor market retains the resilience seen in previous months.
Estimates point to moderate job creation and an unemployment rate holding near 4.3%.
The Federal Reserve faces an unusual situation: it must prepare for its December meeting with an incomplete dataset. Although some officials, such as Christopher Waller, have indicated that rate cuts could be considered if the economy shows more evident signs of cooling, the market has lowered its expectations. Currently, the probability of a 25-basis-point cut sits slightly above 40%, down from 55.4% last
week, reflecting uncertainty about the direction of monetary policy.
In conclusion, the S&P 500’spullback in November 2025 reflects a combination of factors: doubts about the AI investment cycle, mixed consumer signals, and a Federal Reserve navigating with limited information. The coming days will be decisive, with earnings from Nvidia, Walmart, and Target, as well as the delayed labor report. If the data confirm a moderate cooling scenario, the current correction
could be viewed as a healthy adjustment. But if they reveal a more pronounced deterioration, the market may extend its decline. In this environment, prudence and selectivity in risk allocation remain essential for closing out the year.