Intraday Market Analysis: Sector Rotation Drives Mid-Session Declines

This analysis is based on the Reuters report [1] published on November 13, 2025, covering mid-session US market dynamics. Markets are trading broadly lower as investors adjust to the end of the longest government shutdown in U.S. history and navigate significant data uncertainty. A pronounced sector rotation from growth to defensive positions is underway, with technology and utilities suffering major declines while healthcare and consumer defensive sectors provide relative stability. Federal Reserve policy uncertainty has intensified, with speakers expressing skepticism about December rate cuts, reducing market expectations to approximately 53% probability [1].

The major indices are showing significant weakness in mid-session trading [0]:

• S&P 500
  : 6,766.23 (-60.24, -0.88%)
• Nasdaq Composite
  : 22,979.74 (-282.90, -1.22%)
• Dow Jones Industrial Average
  : 47,829.58 (-344.34, -0.71%)
• Russell 2000
  : 2,408.27 (-42.53, -1.74%)

Market breadth reflects broad-based risk aversion, with declining issues outnumbering advancers by 1.34-to-1 on the NYSE and 1.94-to-1 on the Nasdaq [1]. This negative breadth indicates that the market weakness is not concentrated in specific areas but represents a broad risk-off sentiment across the market.

A significant sector rotation is the defining characteristic of today’s trading session [0]:

• Healthcare (+0.91%) - benefiting from defensive positioning
• Consumer Defensive (+0.55%) - showing resilience amid market uncertainty
• Basic Materials (-0.21%) - relatively stable performance

• Utilities (-2.47%) - worst performing sector, likely due to interest rate sensitivity
• Consumer Cyclical (-1.65%) - reflecting economic growth concerns
• Technology (-1.21%) - ongoing rotation from growth stocks
• Energy (-1.04%) - impacted by broader market weakness

This rotation pattern suggests investors are seeking safety amid policy uncertainty and data gaps, moving away from rate-sensitive growth stocks toward more defensive positions [1].

The market is adjusting to the end of the longest government shutdown in U.S. history, with significant implications for economic data availability. The White House has indicated that October employment and CPI reports may never be released, creating a data vacuum that affects both Federal Reserve decision-making and trader positioning [1].

Multiple Fed speakers have expressed skepticism about another interest rate cut in December, causing investors to scale back expectations. The probability of a 25-basis-point rate cut in December has fallen to approximately 53%, down from 70% last week [1]. Additional Fed speakers are scheduled throughout the day, including Minneapolis Fed President Neel Kashkari at a research conference [2].

The Nasdaq is set for its third consecutive session of declines, with heavyweights Nvidia (-2.6%) and Alphabet (-2.3%) acting as major drags on the S&P 500 [1]. This ongoing rotation has benefited the Dow, which has achieved back-to-back record highs after previously lagging the S&P and Nasdaq this year.

Several corporate developments are influencing individual stock movements [1]:

• Cisco Systems (+4.5%)
  gained after raising full-year profit and revenue forecasts, citing demand for networking equipment amid AI-driven data center expansion
• Disney (-8.9%)
  plunged after signaling a potentially prolonged distribution fight with YouTube TV over its cable channels
• Sealed Air (+19.6%)
  jumped significantly on reports that equity firm Clayton Dubilier & Rice is in talks to acquire the packaging company

Memory makers are also under pressure, with Western Digital (-5.4%) and Sandisk (-8.0%) declining following weak results from Japan’s Kioxia [1].

The market dynamics reveal several interconnected factors driving today’s trading:

1. Data Vacuum Impact:
   The government shutdown aftermath has created unprecedented data gaps, forcing market participants to rely on alternative indicators and increasing uncertainty about economic conditions [1].

2. Policy Rate Sensitivity:
   Utilities’ underperformance (-2.47%) combined with reduced rate cut expectations (53% probability) demonstrates the market’s heightened sensitivity to Federal Reserve policy signals [1].

3. Growth vs. Value Rotation:
   The divergence between Dow outperformance and Nasdaq weakness illustrates a sustained rotation from growth to value stocks, potentially indicating a shift in market leadership for the coming months.

The current environment suggests several structural implications:

• Defensive Positioning:
  Healthcare’s outperformance (+0.91%) amid broad market weakness indicates investors are seeking safety and dividend stability amid uncertainty [0].

• AI Sector Differentiation:
  While AI-related stocks face pressure, Cisco’s positive performance (+4.5%) on AI-driven networking demand suggests selective opportunities within the broader technology sector [1].

• M&A Activity:
  Sealed Air’s significant gains (+19.6%) on acquisition talks indicate that M&A activity continues to provide catalyst opportunities even in uncertain markets [1].

1. Data Uncertainty Risk:
   Permanent gaps in economic data could increase market volatility and make policy decisions more challenging for the Federal Reserve [1].

2. AI Earnings Risk:
   Nvidia’s earnings next week represent a critical test for technology sector optimism and could trigger significant market movement [1].

3. Policy Stance Risk:
   Continued hawkish commentary from Fed speakers could further reduce rate cut expectations, potentially accelerating the rotation away from growth stocks [1].

1. Defensive Sector Strength:
   Healthcare and consumer defensive sectors may continue to provide relative stability amid ongoing uncertainty [0].

2. Selective Technology Opportunities:
   Companies with strong fundamentals and AI-related demand (like Cisco) may outperform the broader technology sector [1].

3. M&A Catalysts:
   Acquisition activity continues to provide significant upside potential for target companies, as demonstrated by Sealed Air’s performance [1].

Current market conditions reflect a complex interplay of government shutdown aftermath, Federal Reserve policy uncertainty, and sector rotation dynamics. The S&P 500 is testing support around 6,760, with key resistance at 6,800 [0]. Market breadth indicates broad-based weakness, with declining issues significantly outnumbering advancers across both NYSE and Nasdaq exchanges [1].

The rotation from growth to defensive sectors appears established, with healthcare leading gains while utilities and technology face significant pressure. Federal Reserve speakers’ hawkish tone has reduced December rate cut expectations to 53%, down from 70% last week [1]. Investors should monitor afternoon Fed speakers for additional policy clues and watch for technical level breaches that could accelerate current trends.

Market chop is expected over coming weeks as the full impact of the data vacuum becomes clearer, with defensive positioning likely to remain favored until economic data flow normalizes and policy uncertainty resolves [1].