November 2025 S&P 500 Drawdown and Late-Month Recovery Analysis

The S&P 500 experienced a 4.55% high-to-low drawdown in November 2025, as confirmed by the Seeking Alpha report [10]. The decline was initially driven by concerns over AI valuation sustainability and fading expectations of imminent Fed rate cuts [10]. However, sentiment shifted dramatically in the final two weeks of the month, propelling a recovery. This reversal was triggered by labor market data that increased the probability of a December rate cut above 50% and positive earnings from key market participants like Nvidia [10]. Internal market data [0] shows the index ended November down 0.48%, with the Nasdaq Composite down 2.45% and Dow Jones Industrial Average up 0.04%, reflecting varying sector performance.

1. Labor market dynamics and rate-cut expectations remain critical drivers of short-term market sentiment, with data releases capable of quickly reversing negative trends.
2. Positive earnings from AI-related companies like Nvidia helped mitigate broader AI valuation concerns, supporting the late-month recovery.
3. The S&P 500’s resilience (ending the month with a relatively small decline despite a sharp drawdown) indicates underlying market support amid volatility.

• Risks
  : Ongoing Fed policy uncertainty, potential AI valuation corrections, and labor market stability remain key risks to market sentiment [10].
• Opportunities
  : The increased probability of rate cuts could support market upside if confirmed by future Fed actions, while positive earnings from growth sectors like AI may sustain investor interest.

November 2025 saw the S&P 500 undergo a 4.55% drawdown followed by a late-month recovery. The index ended the month down 0.48%, with the Nasdaq down 2.45% and Dow up 0.04%. The drawdown was driven by AI valuation concerns and fading rate-cut hopes, while the recovery stemmed from labor market data boosting rate-cut probabilities and positive earnings. This event highlights the sensitivity of market sentiment to macroeconomic data and earnings from high-impact companies.