Market Update – November 16th 2025

It was an up-and-down week for stocks. U.S. stocks as the market rallied on Monday and then sold off on Thursday. The S&P 500 and Dow finished fractionally higher for the week up less than half a percent. The NASDAQ ended slightly lower, down half a percent. Technology and AI sectors are underperforming in November after a strong rally since April. Many of you have asked if we are in an AI bubble. I don’t feel we are. There is concern that mega-cap tech companies look to be facing challenges as they shift to asset-heavy business models, potentially impacting margins and free cash flow. What tech stocks are experiencing right now is just normal profit-taking, not some shift in their long-term outlook or growth prospects. Rather than my normal theme this week my update will focus on the impact of the 43-day U.S. shutdown, which concluded Wednesday, as that was the big story of the week. The new funding bill extends operations through January 30, 2026.

The end of the shutdown means that the roughly 1.4 million federal workers who have gone without pay, about half of whom were furloughed, are eligible for backpay. Most of these paychecks should be distributed by Wednesday, November 19. The Office of Personnel Management (OPM) is setting expectations for agencies as they begin to update pay, leave, and benefits for those impacted by the lapse in appropriations. In guidance issued last week, OPM said it “is committed to ensuring that retroactive pay is provided as soon as possible.” Compensation will be provided to both furloughed and excepted federal employees.. The timing of employees receiving their back pay varies, depending on what payroll provider an agency uses. Employees from the General Services Administration (GSA) and OPM are among the first to receive their retroactive paychecks, with an expected deposit date set for yesterday. Employees at the departments of Veterans Affairs, Energy, and Health and Human Services, as well as civilian employees from the Defense Department, are expected to receive their deposits today.

Monday, affected employees from the departments of Education, State, Interior and Transportation, as well as the Environmental Protection Agency, National Science Foundation, Nuclear Regulatory Commission, Social Security Administration and NASA, are all expected to receive their back pay. Finally, on Wednesday, employees from the departments of Agriculture, Commerce, Treasury, Labor, and Justice, along with the Department of Homeland Security, the Department of Housing and Urban Development, and the Small Business Administration, are projected to get their paychecks.

The shutdown is estimated to reduce fourth-quarter 2025 economic growth by 1.5 percentage points. This lowers projections to 1.0%-1.5% economic growth in the fourth quarter. Nonetheless, the economy remains strong. Expect the growth to continue in the first quarter and throughout 2026. The Congressional bill to end the shutdown also reverses the layoffs of the more than 4,000 federal workers who lost their jobs at agencies including the Department of Commerce, Education, and Homeland Security. The bill also prevents any more layoffs until at least the end of January.

U.S. economic data that was halted during the shutdown could resume in the weeks ahead, albeit some data may be murky still. For example, the U.S. nonfarm-jobs report for October is expected to be released next week. The report will include total jobs added, the report will not include the unemployment rate. That’s because the household survey was not completed. The BLS (Bureau of Labor Statistics) is expected to release a full schedule of its economic data releases in the days ahead, which should include dates for critical inflation and labor-market data.