Market Update 11/10/25

By Jerry Wagner

Market snapshot

•  Stocks: The major market indexes finished down last week. The Dow Jones Industrial Average lost 1.21%, the S&P 500 Index fell 1.63%, the NASDAQ Composite declined 3.04%, and the Russell 2000 small-capitalization index lost 1.88%.

•  Bonds: The 10-year Treasury bond yield rose 1 basis point to 4.094%. The U.S. Aggregate Bond ETF (AGG) dipped a very mild 0.01%. The 20-year Treasury Bond ETF (TLT) declined 0.4%. 

•  Gold: Gold futures closed last week at $4,014.10, up $17.60 per ounce, or 0.44%.

•  Market indicators and outlook: Technical indicators are mostly positive for stocks, as are the strategies. The economic environment is classified as Normal, favoring gold and stocks from a return perspective. Volatility is High and Rising, a regime historically favorable, although volatile, for stocks over other asset classes.

For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

It was a difficult week for most asset classes, as bonds and all three major U.S. stock indexes declined. Only gold eked out a gain.

The primary cause was the impact of the ongoing government shutdown, which set the record as the longest ever. Although Republicans had used this tactic more than a dozen times in the past without success, this time it was the Democrats who refused to vote for a continuing resolution to keep the government open. As in past attempts, the minority party sought to use its ability to keep the majority party from reaching the 60 votes needed to break the Senate filibuster in an effort to gain an advantage.

The results were predictable: government offices closed; funding for government programs became short to nonexistent; pay was delayed for government workers, including troops (but not for members of Congress, who could actually do something about the closure); and the nation’s airports faced an ever-worsening crisis of canceled and delayed departures.

All of this weighed on financial markets. Once again, uncertainty in national policy caused disruption. Still, it was remarkable the markets held up as well as they did. Market losses were far less damaging than the crushing impact on many private households.

Few federal economic reports were released during the week, as the agencies that produce them were closed. However, some private employment data did come out that seemed to worsen matters. And while few government officials were available in Washington to issue policy pronouncements, our national bankers saw fit to try to fill the void by taking to the microphones to forecast a recession or further market declines.

Earnings reports continued to be reported throughout the week. Although market reactions were not always as expected (Palantir beat revenue and earnings estimates and provided positive forward guidance but still fell 8% right after its report), most results were better than forecast and pointed to improving prospects.

Of course, that was last week. This week began with the prospects of a settlement clearly in sight, and the markets immediately reacted and recaptured most of last week’s losses.

What a difference a week makes. As the chart shows, last week the S&P tested its shorter-term moving average and rising trend line of support. The NASDAQ did the same. With Monday’s rally, it appears that the test was successful and that stocks are likely to resume their move higher into the usual year-end rally period.

The bottom line: Stocks continue to signal higher prices by year-end. But as the regime discussion at the end of this update suggests, those gains may be accompanied by increased volatility.

Bonds

Two weeks ago, yields spiked higher. They stabilized last week before resuming their decline following the end of the shutdown this week. Despite the short-term rise in recent weeks, yields continue to trend lower overall. As shown in the chart above, yields broke below their moving-average support in July. While there have been brief rallies since, the overall pace has remained lower, even resulting in a “death cross” pattern (when the 50-day moving average falls below the 200-day) at the start of August.

As a result of the downward trend in yields through the summer months, bonds have been in rally mode. The price of the long-term bond ETF remains above its moving average, despite the slowdown in the recent decline in yields, suggesting that bonds may continue to move higher as the year comes to a close.

Meanwhile, the high-yield bond market, which had paused for a bit, now looks likely to move higher with stock prices. The tailwind from both stocks and bonds is pushing this hybrid bond higher. The trend favors this asset class through year’s end.

Gold

The only major asset class to gain ground last week was gold. Even among commodities, it was the top performer. A traditional safe harbor, gold was sought as a refuge from the uncertainty surrounding the government shutdown and concerns expressed about the economy. Falling bond prices have also been supportive, along with continued central bank demand—highlighted by China’s 12th consecutive month of purchases.

Gold has now risen more than 50% this year (its best performance since 1979)—even as the U.S. dollar has strengthened. Typically, the two asset classes move in opposite directions.

Flexible Plan Investments (FPI) is the subadviser to the only U.S. gold mutual fund, The Gold Bullion Strategy Fund (QGLDX). Launched in 2013, the fund is designed to track the daily price changes in the precious metal in a more tax-efficient manner than its ETF counterpart, GLD.

The indicators

The short-term technical indicators of future stock market price changes I watch are now mostly positive. However, our QFC S&P Pattern Recognition strategy ended the week in a neutral position with 0% exposure to the S&P 500 Index.

Our QFC Political Seasonality Index strategy, while successfully navigating the ups and downs of October, has been out of the stock market since the close on November 6. The strategy will return to a fully invested position at the close on November 12. (Our QFC Political Seasonality Index—with all of the daily signals—is available post-login in our Weekly Performance Report section under the Domestic Tactical Equity category.)

FPI’s intermediate-term tactical equity strategies maintain their positive bias. Our Classic strategy remains 100% long equities. The Volatility Adjusted NASDAQ strategy finished the week at a 120% net long exposure to the NASDAQ 100. The Systematic Advantage strategy ended the week 90% net long. Our QFC Self-adjusting Trend Following strategy remains neutral, 100% invested defensively. Our QFC Dynamic Trends strategy, which outperformed the S&P 500 in the second quarter, also remains 100% invested defensively. Because these strategies—and the QFC S&P Pattern Recognition strategy—can employ leverage, their investment positions may exceed 100%.

FPI’s Growth and Inflation measure, one of our Market Regime Indicators, shows that markets are in a Normal economic environment stage (inflation and GDP are growing). Historically, a Normal environment has occurred 60% of the time since 2003. In a Normal climate, gold outperforms stocks and bonds on an annualized return basis, but it also carries the most downside risk. From a risk-adjusted perspective, Normal is one of the best stages for bonds, followed by gold and then stocks.

Our S&P Volatility Regime indicator is registering a High and Rising reading. This environment is the lowest-returning regime for all three asset classes. Still, it favors stocks over gold and bonds from an annualized return standpoint. While it is a rising-price regime for stocks, it is also the riskiest period in terms of drawdowns. Gold comes in second in returns and faces its second-riskiest volatility regime. Bonds also tend to post positive returns in this regime and, as is typically the case, show the lowest risk score. The High and Rising combination has occurred 23% of the time since 2003.