Markets Slide on Weak Sentiment and Mixed Labour Data
Week Ending November 7th, 2025
Markets pulled back last week as investors reacted to conflicting labour-market signals, a sharp drop in consumer sentiment, and uncertainty caused by the ongoing U.S. government shutdown. Tech stocks were especially pressured, leading to the Nasdaq’s toughest week since April.
The S&P 500 fell 1.63%, the Nasdaq Composite dropped 3.04%, and the Dow Jones Industrial Average slipped 1.21%. Overseas, the MSCI EAFE Index declined 0.83%.
In Canada, the S&P/TSX Composite Index held relatively steady but finished the week modestly lower as weakness in technology and financials offset gains in materials and energy.
Market Overview
Weekly Market Performance (November 4 – November 8, 2025)
- S&P 500: -1.63%
- Nasdaq Composite: -3.04%
- Dow Jones Industrial Average: -1.21%
- MSCI EAFE (International Developed Markets): -0.83%
- S&P/TSX Composite Index (Canada): Approx. -1.2% on the week
U.S. Markets: Sentiment Weakens Amid Data Gaps
The week began mixed, with the S&P 500 and Nasdaq rising modestly while the Dow slipped. Mid-week optimism returned after a stronger-than-expected ADP employment report showed private-sector hiring picking up again in October.
However, as the week progressed:
- Fresh reports of rapidly rising corporate layoffs unsettled investors
- Concerns about stretched valuations - particularly in AI-linked companies have resurfaced
- Consumer sentiment fell to a three-year low, adding to market anxiety
- The ongoing U.S. government shutdown left investors without official economic data, increasing uncertainty
- Friday brought some relief when markets staged a midday rebound, with the S&P 500 and Dow turning positive and the Nasdaq erasing most of its early losses by the close.
Canada & the TSX
The Canadian market trailed the U.S. again last week, weighed down by tech-sector softness and cautious investor sentiment.
Sector snapshot:
- Technology: Weakness persisted, mirroring global tech selling
- Materials: Gold and copper strength offered partial support
- Financials: Banks remained subdued as investors awaited earnings
- Energy: Held firm thanks to commodity stability, though price moves were muted
Canadian market sentiment was steadier than in the U.S., helped by commodity resilience, but not enough to push the index higher overall.
Budget Overview – Canada’s “Canada Strong” Plan
Prime Minister Mark Carney’s first federal budget, tabled November 4, 2025, lays out a major fiscal package aimed at transforming the Canadian economy and reducing its dependency on the U.S. trade partner. Here are the key take-aways:
Major Spending & Investments
- The budget proposes C$280 billion in investment over five years in areas such as infrastructure, housing, defense and competitiveness.
- Infrastructure: C$115 billion over five years.
- Productivity/competitiveness: C$110 billion.
- Defense & security: C$30 billion.
- Housing: C$25 billion.
Deficit & Savings
- The 2025-26 fiscal year deficit is projected at approx. C$78 billion, roughly double the prior year.
- To help offset spending, the government plans about C$60 billion in savings over five years, including civil-service cuts (~10%) and tax-compliance measures.
Reform Measures & Strategic Shifts
- Defense: Canada will accelerate its path to meet NATO’s 2% of GDP target, diverting some procurement away from U.S. dependency.
- Immigration: Permanent-resident targets will drop slightly; temporary-resident levels are being significantly cut.
- Fiscal role: Carney’s government emphasizes “generational investments” but also clear “sacrifices” in public service and efficiencies.
The Bottom Line
The spending surge is a signal that Ottawa is shifting toward more active economic management in response to global disruption and U.S. trade tensions.
The expanded deficit raises concerns about debt servicing and long-term fiscal sustainability.
For investors, the budget reinforces the importance of Canadian resources, defense industries, infrastructure and technology as growth themes.
At the same time, the budget underscores structural change, which can create winners (materials, defense, infrastructure) and losers (sectors reliant on federal contracts or stagnant policy areas).
What’s Driving the Market
Labour-Market Confusion
The ADP employment report showed U.S. companies added 42,000 jobs in October — nearly double expectations.
But other data contradicted the upbeat headline:
- October layoffs hit the highest level in 22 years for the month
- Hiring gains remain concentrated in a few specific sectors
- Labour signals remain mixed and difficult to interpret without official government reports
Weak Consumer Confidence
A widely watched sentiment survey dropped to its lowest reading since 2022, raising fresh concerns about:
- slower spending
- softening economic momentum
- potential implications for the holiday season
Government Shutdown Impact
With official economic reports delayed, investors relied on private-sector data sources. This increased volatility as markets reacted to incomplete or conflicting information.
Why This Matters
Discipline remains key during weeks with high uncertainty.
- Valuation caution: Tech leadership remains powerful but vulnerable to quick sentiment shifts.
- Diversification strengths: Canada’s resource exposure can help soften periods of U.S. tech volatility.
- Economic clarity: A clearer picture of jobs, inflation, and consumer health should emerge once the government reopens and official reporting resumes.
Periods like this highlight why balanced portfolios — across geographies and sectors — help manage uncertainty.
Economic Snapshot
Federal Reserve Commentary:
Fed officials emphasized the need for flexibility, highlighting that future rate decisions remain data-dependent. With the shutdown limiting real-time data, the Fed remains cautious about interpreting economic trends.
Key Economic Reports: Week Ahead (November 10 – 14, 2025)
Tuesday, November 11
- NFIB Small Business Optimism Index
Wednesday, November 12
- Fed Presidents Anna Paulson and Raphael Bostic speak
Thursday, November 13
- Weekly Jobless Claims
- Consumer Price Index (CPI)
- Federal Budget
- Additional commentary from Fed officials Williams, Musalem, Hammack, and Bostic
Friday, November 14
- Retail Sales
- Producer Price Index (PPI)
- Business Inventories
- Remarks by Fed Presidents Logan and Schmid
Corporate Earnings: This Week
Monday, November 10
- CoreWeave Inc. (CRWV)
- Barrick Mining Corporation (B)
Wednesday, November 12
- Cisco Systems, Inc. (CSCO)
- TransDigm Group (TDG)
- Manulife Financial Corp. (MFC)
Thursday, November 13
- The Walt Disney Company (DIS)
- Applied Materials (AMAT)
- Brookfield Corporation (BN)
- NetEase, Inc. (NTES)
“Writing is thinking on paper.”
– William Zinsser
What is located in the middle of nowhere?
Last Week's Riddle: Stick your fingers in my eyes, then move them and watch my jaws open wide. What am I?
Answer: A pair of scissors.
Team photo day always brings big smiles—and a little laughter!
Footnotes and Sources
1. WSJ.com, November 7, 2025
2. Investing.com, November 7, 2025
3. CNBC.com, November 3, 2025
4. CNBC.com, November 4, 2025
5. WSJ.com, November 5, 2025
6. CNBC.com, November 7, 2025
7. WSJ.com, November 5, 2025
8. CNBC.com, November 6, 2025
9. CNBC.com, November 7, 2025
10. IRS.gov, May 29, 2025
11. WebMD.com, June 12, 2025
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