The holiday-shortened week of November 24, 2025 opened with risk appetite rebuilding after last Thursday’s post-Nvidia (NVDA) shakeout and closed with a steadier tone across most assets. Nvidia’s blockbuster report on November 19 briefly lifted sentiment, but markets sold off the next day on valuation nerves and AI fatigue. By this week, the damage was being repaired as dip-buyers and better macro-odds helped equities claw back losses.

Volatility cooled in step with the rebound. After spiking early in the week, the VIX faded into the long weekend, sliding from the low-20s on Monday toward the high-teens by Wednesday, consistent with de-risking that never morphed into disorderly selling and with hedges being monetized as price action stabilized.

The macro backdrop offered just enough reassurance. Weekly jobless claims fell to a seven-month low of 216,000, a reminder that layoff headlines haven’t yet translated into a broad deterioration in separations, even as private trackers continue to flag rising WARN notices and announced cuts. The combination of resilient claims but softer hiring anecdotes has kept the “cooling, not cracking” labor narrative intact and helped the tape regroup after last week’s growth scare.

Inflation expectations were another swing factor. With official calendars still normalizing post-shutdown, investors leaned on nowcasting and incoming price proxies. The Cleveland Fed’s model pointed to November core CPI running near a quarter percent month-over-month, compatible with continued disinflation. That in turn, fed into rates pricing that moved decisively toward a December cut. By mid-to-late week, Fed-funds futures implied roughly an 85%+ probability of a 25 bp move at the December 10 meeting, an upswing from roughly one-third just a week earlier and a notable psychological tailwind for duration-sensitive assets.

Policy mechanics and Washington also figured as background catalysts. With the Federal government having reopened on November 13 via a continuing resolution that funds agencies into late January, the data spigot has been turning back on, allowing investors to replace proxy reads with official releases in the weeks ahead. That looming return to official data has helped narrow uncertainty bands around inflation and labor prints, even as markets still brace for timing quirks after the record shutdown.

Under the hood, sector performance told the real story of the recovery. Health care again emerged as a relative winner this week, a continuation of November’s rotation toward balance-sheet durability and non-AI earnings drivers. Communication services were mixed, while defensives like staples held their bid. In ETF aggregates, health care posted low-single-digit weekly gains even as tech fell multiple percentage points, aligning with an ongoing shift away from the crowded AI complex.

The risks that kept investors cautious were familiar but manageable. First, AI capex concentration and valuation sensitivity remain a live overhang as last Thursday’s tape reminded investors that narrow leadership on up days is vulnerable to single-name headlines.

Second, labor-market crosscurrents bear watching as claims are calm, but private layoff indicators have ticked up, and any sharp turn there would challenge the “soft-landing” consensus that underpins current multiples. Third, policy timing risk remains: while the market now leans heavily toward a December cut, a hotter-than-expected price print could still force repricing, with the first place you’d expect to see it being the VIX term structure and long-duration growth.

Net-net, the week has read like a recovery with rotation. After the Nvidia-day air pocket, stocks stabilized as volatility ebbed, Fed cut odds climbed, and incoming data sketched a still-resilient labor backdrop.

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