This year my family and I spent Thanksgiving a little differently; we traded turkey and cold weather in the mid-west for sunshine and sand in Cancun. It was our first time traveling out of the country for the holiday, and stepping into a new setting offered some welcomed perspective. Much like markets this year, the experience reminded me that change can be healthy, and sometimes staying patient through a little uncertainty leads to a rewarding payoff.
Investors who stuck with their plan through November were rewarded, as the major stock indexes bounced back from a brief mid-month pullback to finish near record highs. That rebound marked the seventh straight month of gains for the S&P 500, providing nice momentum heading into the holiday season. Growing confidence that the Federal Reserve may begin cutting interest rates helped fuel the rally, but optimism around the economy, corporate earnings, and ongoing investment in artificial intelligence also played meaningful roles.
As we head into December, the job market will continue to steer market sentiment. Healthy employment is critical to sustaining consumer spending, especially during the important holiday shopping period. We’re expecting job growth to remain positive, even if it’s slower, as government data catches up now that the shutdown has passed. It’s also worth noting that the roughly $130 billion in annualized tax cuts from the One Big Beautiful Bill Act (OBBBA) are scheduled to kick in starting February 2026. Meanwhile, the White House has shifted its focus toward affordability pressures. The “K-shaped” economy—where higher-income households benefit from rising assets while many others face day-to-day financial strain—remains a real challenge. Policies that help lift the lower half of that “K,” potentially through housing initiatives, could help support consumer spending.
Even as consumers remain resilient, corporate America is delivering. Third-quarter earnings results once again demonstrated companies’ ability to clear a tougher bar. More than 82% of S&P 500 companies beat earnings expectations, the highest rate since 2009. Profits grew 13%, marking the fourth straight quarter of double-digit growth. Despite higher tariff costs, profit margins expanded thanks to disciplined cost control and productivity improvements. Management teams broadly expressed confidence in demand heading into next year, and analysts have already begun raising their earnings expectations for 2026. All of this reinforces the case for keeping equity exposure aligned with long-term targets.
Looking toward 2026, several factors deserve close monitoring. The Fed’s next moves remain front and center, with inflation and employment data guiding how many rate cuts may follow the one widely expected in December. Investors will also be paying attention to how AI investments evolve, the impact of midterm elections, the direction of the U.S. dollar, and ongoing geopolitical risks.
In this environment, diversification and risk management will matter more than ever. We should expect periods of volatility; those pullbacks may create attractive opportunities for disciplined investors. Areas tied to long-term drivers like AI, fiscal stimulus from the OBBBA, and shifts in regulatory policy could offer compelling potential, but flexibility will be key. Ultimately, market corrections are simply part of the journey in pursuing meaningful long-term returns.
Experiencing the holiday in a completely new environment helped me step back and see things with fresh eyes. As we move into 2026, I encourage investors to do the same: keep perspective, stay flexible, and remember that short-term noise rarely changes the long-term outlook.
Have a blessed week!
Joe Shearrer
Opinions voiced above are for general information only & not intended as specific advice or recommendations for any person. All performance cited is historical & is no guarantee of future results. All indices are unmanaged and may not be invested directly. Precious metal investing is subject to substantial fluctuation and potential for loss.
The economic forecast outlined in this material may not develop as predicted & there can be no guarantee that strategies promoted will be successful.
Fervent Wealth Management is a financial management and services entity in Springfield, Missouri.