These four things worry investors. Wall Street is off to its weakest start to the month since April
The first cause for concern is the ongoing U.S. government shutdown. Without regular publications from statistical offices, the market is groping in the dark, a operational impacts are starting to become apparent. “If the shutdown extends beyond next week and into the Thanksgiving holiday period, I think we will see a full-blown market correction,” Jamie Cox, a financial advisor and managing partner at Harris Financial Group, told MarketWatch.
The scale of disruptions is growing. There are air traffic delays, food program problems and failure to pay federal workers. This is undermining household confidence just before the holiday shopping season. “There is some optimism that the shutdown could end next week, but the key may be whether President Trump is willing to get personally involved,” said Thomas Block, policy strategist at Fundstrat.
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In turn, Alec Phillips, chief U.S. political economist at Goldman Sachs, estimates that the six-week closure could reduce annualized quarterly GDP growth in the fourth quarter of 2025 by 1.15 percentage points, “primarily as a result of unpaid leave for federal employees.”
The second source of tension is consumers
The University of Michigan's preliminary reading on the University of Michigan's sentiment index fell in November to its lowest level since the record low in June 2022, harder than Wall Street expected. “As the federal government shutdown drags on for more than a month, consumers are beginning to express concerns about potential negative consequences for the economy” – points out Joanne Hsu, director of Surveys of Consumers on the university's website.
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“November's decline in sentiment was broad, visible across the entire population – by age, income and political affiliation. One significant exception: consumers with the highest percentage of shares in stocks recorded a noticeable 11% increase in sentiment, supported by the continued strength of the stock market,” adds the expert.
The market would eagerly await the monthly retail sales data, but the macro calendar was upended by the administration shutdown.
The third area of risk is the labor market. On Thursday, the indexes took a hit after a report by the outplacement company Challenger, Gray & Christmas, which showed a spike in layoffs in October. Under normal circumstances, investors would have an official labor market report at their disposal, but this report was not published due to the government shutdown. As a result, alternative data sources are gaining in importance, and each negative surprise has a stronger impact on valuations because it is more difficult to compare it with the full picture of the economy.
Such information asymmetry increases volatility and promotes a defensive attitude of managers.
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(Too) big tech share
The fourth concern remains valuations and the index's concentration on a narrow group of technology companies. Euphoria all around artificial intelligence brought the S&P 500 to a series of records this yearbut at the same time it has made the market overly dependent on a few giants trading at earnings multiples well above the index average.
This is why the weakness of IT companies can outweigh the strength of other sectors. Last week, the IT sector had its worst week since April, and the S&P 500 – despite November's stumble – still ended Friday down just 2.4%. below the record from October 28. A formal correction would require a decline of at least 10%. since the recent peakbut markets rarely fall in a straight line. “Corrections are normal,” reminds Carol Schleif, chief strategist at BMO Private Wealth. “They're never comfortable, but they're normal.”
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The common denominator for all four threads is uncertainty, fueled by the political calendar and the lack of complete data. The lack of macro releases makes it difficult to assess the strength of the economy just when questions about consumer resilience and employment sustainability are growing. Investors, aware of high valuations and risk concentration, react faster to negative signals and are more willing to secure profits, which increases the volatility at the beginning of the month.
All this does not necessarily mean the beginning of a bear market, but it forces greater caution in portfolio management. Greater sector diversification, a selective approach to technology companies and patience while waiting for the return of regular data can help get through this nervous period.
