WEEKLY MARKET RECAP – NOVEMBER 28, 2025

U.S. stock indexes ended the holiday-shortened week with gains, supported by dovish remarks from several Federal Reserve officials and a series of softer-than-expected economic reports that reinforced expectations for a December rate cut. Small-cap stocks led the rally, with the Russell 2000 climbing 5.52%. The tech-heavy Nasdaq Composite also rebounded strongly from the prior week’s decline as concerns about high valuations and heavy AI spending gave way to renewed optimism about the sector’s long-term growth potential. Markets were closed Thursday for Thanksgiving.

Delayed retail sales data indicated a slowdown in U.S. consumer spending at the end of the third quarter. The Commerce Department reported that sales rose 0.2% in September, down from 0.6% in August and below expectations of roughly 0.4% (October’s release was delayed by the recent federal shutdown). Excluding autos and gasoline, sales edged up just 0.1%. Control group sales—used to calculate GDP—declined 0.1% month over month.

Additional delayed data included September producer price index (PPI) results. On Tuesday, the Bureau of Labor Statistics reported that headline PPI increased 0.3% for the month, roughly matching forecasts, while core PPI rose a softer-than-expected 0.1%.

Initial jobless claims declined to 216,000 for the week ended November 22, down from the prior week’s revised 222,000 and the lowest level since April. However, continuing claims climbed by 7,000 to 1.960 million, just below the year-to-date peak reached in late July.

The Conference Board reported a sharp drop in consumer sentiment for November, with its Consumer Confidence Index falling 6.8 points to 88.7—the lowest reading since April. Chief economist Dana Peterson noted that “all five components of the overall index flagged or remained weak,” with respondents frequently citing prices and inflation, tariffs and trade, and politics as key concerns.

The Federal Reserve’s Beige Book, released Wednesday, indicated that economic activity changed little across most of the 12 districts. The report noted that employment “declined slightly,” prices rose “moderately,” and input cost pressures were “widespread in manufacturing and retail, largely reflecting tariff-related increases.” Consumer spending continued to soften overall, though higher-end retail remained relatively resilient.

U.S. Treasuries posted modest gains as yields declined across most maturities on rising expectations of December policy easing. (Bond prices and yields move inversely.) Municipal bonds also advanced, though issuance remained light and secondary-market liquidity thinned as the week progressed. Investment-grade and high-yield corporate bonds outperformed Treasuries as improving risk sentiment supported credit markets.