Thanksgiving Rally Saves the Month

December 1, 2025

We have been reminded over the past couple of months that history is a guide and not an absolute.  September is historically the worst month of the year for stocks, but this year the S&P 500 was up 3.5%.  October has a bad reputation, as it has been the home of most market “crashes”, but this year the S&P 500 was up more than 2%.  November begins what has historically been the best 3-month period for stocks, but the month opened lower and moved lower for most of the month until a powerful 3.7% rally Thanksgiving week brought the index back into the black for an 8^th straight month. We had mentioned on several occasions that stock valuations have become extended and while the timing was historically unusual a pullback in prices, albeit short lived, was not surprising. Concerns were once again surfacing about the high level of spending on artificial intelligence (AI) and the Federal Reserve’s expected interest rate cut in December came into question.  At the end of the month the S&P 500 had gained .1% and is now up 16.5% for the year.  Interest rates edged lower during the month, as did oil prices, but gold gained 5.5%.

The month began with profit taking in the AI names that had been driving the market and a continuation of the record government shutdown. Several AI stocks reported quarterly results that were stronger than expected, but the earnings reports did little to quell the selling. The tech heavy NASDAQ had its worst week in 6 months, and the S&P 500 ended the week with a loss of 1.6%.  The second week began with a rebound as some were seeing value and a rotation from risk assets to more value-oriented names drove the 30 stock Dow Industrial average to it highest level in history.  However, on Thursday disappointing earnings from Dow component Disney ignited a selloff in that name that spread to other value stocks sending the overall market down nearly 2%. At the end of a volatile week the S&P 500, despite a strong start, was up just .1%.  The 3^rd week featured the quarterly report from the world’s largest company and since AI has been driving the market and Nvidia drives AI it is the most closely watched report each quaarter.  Their report could not have been better with sales, earnings, and guidance, all higher than expected.  The report sent the stock and the overall market sharply higher, but the selling was not over, and the stock reversed and closed nearly 4% lower, taking the overall market along for the ride.  At the end of the week the S&P 500 had given up another 1.9%.  The final week of the month included Thanksgiving and just a half day of trading on Friday. The week is historically a good one for the market, but light volume can increase volatility.  This year the week started with an explosive 3% rally in the technology sector and the market kept moving higher through month end, with technology stocks gaining over 5% for the week.

Much like November, December has traditionally been a good month for stock market performance, closing in positive territory more often than any other month. With that said, the most recent quarterly earnings reports have been much better than analysts had expected but many have been greeted with selling.  We often say stock valuations do not matter, until they do, and right now the focus of the market appears to be valuations.  We believe concerns about AI spending are misplaced as we are in the early innings of this revolution.  Corrective periods have always been an opportunity to buy high quality stocks, so we have been looking for opportunities.  December is traditionally a period of optimism and traders are often in a party mood which drives the market higher through the end of the year.

If you know someone who would be interested in learning more about Greenberg Financial Group or taking advantage of our complementary financial plan, please contact us at 520-544-4909, or visit our website at www.greenbergfinancial.com. As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance. We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:00 AM to 10:00 AM on KNST AM 790.  You can also listen to us on iHeart radio, follow us on Twitter@gbergfinancial or on Facebook under Greenberg Financial Group.  Previous radio shows are available by going to www.iheart.com or using the iHeart app and typing Money Matters with Dean Greenberg.