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November closed with a mixed performance across U.S. equities, underscoring the tension between resilience in some sectors and weakness in others. The standout headline: the Nasdaq posted its first monthly decline since March, breaking a streak of steady gains that had fueled investor optimism throughout most of 2025.
The pullback was most visible in AI-linked stocks, which had driven much of the Nasdaq’s rally earlier in the year. After months of exuberance, investors are reassessing valuations amid concerns about regulatory scrutiny, competitive pressures, and the sheer pace of technological disruption. Companies at the forefront of generative AI and chip innovation saw sharp corrections, reminding markets that even transformative sectors are not immune to cyclical cooling.
Outside of tech, performance was more balanced. The Dow Jones Industrial Average held steady, buoyed by industrials and consumer staples, while the S&P 500 managed modest gains, reflecting strength in healthcare and energy. This divergence highlights the rotation underway: investors are shifting capital from high-growth tech into sectors perceived as more stable in the face of policy uncertainty.
Underlying the market’s mixed tone is the Federal Reserve. Strong U.S. economic data has tempered expectations of aggressive rate cuts in 2026, leaving traders cautious. The lack of clarity on monetary policy continues to weigh on risk appetite, particularly in sectors like technology that thrive on cheap capital.
The Nasdaq’s stumble may not mark the end of the bull run, but it signals a recalibration. AI-linked stocks are entering a phase of consolidation, while traditional sectors provide ballast. For investors, the message is clear: the path into 2026 will be uneven, shaped by both innovation’s promise and policy’s restraint.