The Stock Market Sounds an Alarm Seen Just 1 Time in 25 Years as Investors Get Bad News About the Economy

2 weeks ago 12

Trevor Jennewine, The Motley Fool

Tue, November 11, 2025 astatine 2:44 AM CST 5 min read

U.S. stocks stumbled successful aboriginal November arsenic investors contemplated atrocious quality astir the economy, including the second-worst user sentiment speechmaking successful history.
Meanwhile, the S&P 500 attained a guardant price-to-earnings ratio higher than 23 successful precocious October, a valuation seen during conscionable 1 different play successful the past 25 years.
All 3 large U.S. banal marketplace indexes yet entered a carnivore marketplace the past clip the S&P 500 recorded a guardant price-to-earnings aggregate supra 23.
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S&P 500 (SNPINDEX: ^GSPC) companies are not lone reporting third-quarter net that are amended than Wall Street expected, but besides net are connected gait to summation by treble digits for the 4th consecutive quarter.

Yet, the banal marketplace wobbled during the archetypal week of November. The S&P 500 fell 1.6% and the technology-heavy Nasdaq Composite (NASDAQINDEX: ^IXIC) tumbled 3%, notching its worst play show since President Trump announced sweeping tariffs successful April.

Investors are disquieted astir the authorities shutdown, which had lasted for a grounds 40 days arsenic November 9. They are besides disquieted astir the labour market; hiring slowed sharply implicit the summertime and layoffs deed a 22-year precocious successful October, according to outplacement steadfast Challenger, Gray & Christmas.

Meanwhile, user sentiment has fallen successful 4 consecutive months and the banal marketplace precocious sounded a valuation-based alarm seen conscionable erstwhile successful the past 25 years. Read connected to larn more.

A growling carnivore figurine stands successful beforehand of a downward-sloping chart.

The University of Michigan Consumer Sentiment Index is tabulated each period based connected surveys of astatine slightest 500 households. Participants are asked 5 questions astir idiosyncratic finances and concern conditions. In November, the Consumer Sentiment Index recorded a preliminary speechmaking of 50.3, the 2nd worst effect successful history. The monthly surveys started astir 5 decades ago.

The University of Michigan volition revise that fig erstwhile much information is disposable aboriginal successful the month, truthful the November fig could improve. But it could besides get worse. The scale gave a preliminary speechmaking of 55 successful October, but that fig was aboriginal revised down to 53.1. Consumer sentiment has present deteriorated successful 4 consecutive months.

The University of Michigan besides reported a worsening successful year-ahead ostentation expectations. Consumers expect ostentation to deed 4.7% successful the adjacent 12 months, a tenth of a percent higher than the erstwhile period and good supra the five-year mean of 4.1%. That validates concerns precocious raised by galore businesses: 42% of S&P 500 companies cited ostentation arsenic an contented during their latest net calls, up 6 points from the anterior quarter.