"Risk-off" Returns to Start Month as Crypto Dives

Published as of: December 1, 2025, 9:12 a.m. ET

(Monday market open) After November came in like a lion and left like a lamb, December turned tail as risk-off sentiment resumed to start the month. Cryptocurrency weakness reared again, with Bitcoin (/BTC) down more than 5%. The early selling on "Cyber Monday" came despite solid Black Friday sales and affected tech shares including Nvidia (NVDA). The downturn may reflect soft manufacturing data from China and renewed worries about a possible rate hike in Japan.

U.S. manufacturing data is due soon after the open, while Friday brings the Federal Reserve's favored inflation reading, Personal Consumption Expenditures (PCE) prices. Before that come private readings on U.S. layoffs, and jobs growth. Odds of a Fed rate cut a week from Wednesday are almost 88% this morning, according to the CME FedWatch Tool. The Fed's Beige Book last Wednesday showed more signs of a cooling labor market, as hiring was mostly for replacements, not expansion.

The S&P 500 index eked out a tiny November gain Friday to cap a 3.7% weekly climb and post its seventh straight positive month. The Nasdaq Composite, however, finished with its first monthly loss since April as tech stocks fell about 5% in November amid AI valuation concerns. AI stays in the spotlight this week when Amazon (AMZN) holds a conference in Las Vegas focused on AI and cloud infrastructure, while earnings reports loom from Marvell Technology (MRVL) and CrowdStrike (CRWD) tomorrow afternoon and Salesforce (CRM) Wednesday after the close.

1. Dissent expected at Fed meeting: Fed speakers last week veered more dovish but many still sounded hesitant about easing policy after cutting rates in September and October. The current scorecard suggests that even if the Fed does cut rates again from the current range of 3.75% to 4%, it could be a divided vote. Last time featured two dissents and this time could feature more. One question is where Fed Chairman Jerome Powell might line up, as the chairman's stance can often influence other voters. It's possible that even if the Fed cuts rates, it may be a "hawkish cut," or a cut accompanied by the strong suggestion that no more will come for a while. Powell delivers brief remarks tonight and participates in a panel discussion before the Fed goes silent ahead of next week's meeting. Across the Pacific, rates could move the other way later this month. Bank of Japan Governor Kazuo Ueda said the central bank "will consider the pros and cons of raising the policy interest rate," Bloomberg reported. Stocks in Japan tumbled and softness there appeared to spread to U.S. markets early today. Higher rates in Japan would potentially mean more competition for the U.S. bond market, possibly causing rates to rise here. The benchmark 10-year Treasury note yield popped to 4.06% this morning.
    
2. November trends show broader influence: The S&P 500 index finished November with just a 0.2% gain, while the S&P 500 Equal Weight Index (SPXEW)--which weighs all components the same to smooth out the impact of the mega-caps--rose 1.9%. That suggests strength broadening beyond the mega-caps. It was the second-best month of relative outperformance by the equal-weight index since July 2024, noted Liz Ann Sonders, chief investment strategist, Schwab Center for Financial Research, and equal weight generally led at the sector level as well. "November marked the seventh consecutive monthly gain for the S&P 500, a streak not seen in more than four years," Sonders noted. "The longest run of monthly gains since the S&P 500's inception was an 11-month winning streak that ended in January 1959." Additionally, Sonders added, data show that the S&P 500 index peaked in December more than half the time since 1980. Last week's strong S&P 500 rally came on low holiday volume, raising questions about how much conviction might be behind it, so the question is whether it can continue with participants returning this week.
    
3. Data loom but government mostly sits out: Today features an update on the U.S. manufacturing economy after a mixed picture from several regional reports recently. The November ISM Manufacturing Index, due at 10 a.m. ET, is expected to show only a mild rise to around 49, according to analysts, from last month's 48.7. Anything below 50 indicates contraction. The ISM reports its services sector data on Wednesday, a day that also brings the ADP November employment report. That's a private indicator that entered the spotlight recently due to the government shutdown. Last time out, ADP reported better-than-expected October jobs growth of 42,000, though still relatively lackluster historically. Normally, this would be a week of investors chomping at the bit for a nonfarm payrolls report, but they'll have to wait until December 16 for the next one after slightly better-than-expected September jobs growth. Instead, this Friday's PCE inflation report occupies prime territory on the weekly calendar, with early expectations at 0.3% for headline PCE and 0.2% for core, which excludes volatile food and energy prices. 

Bitcoin futures plunged 5.5% in early action Monday, weighing on shares of crypto-related stocks including Coinbase (COIN), Strategy (MSTR), and Circle Internet Group (CRCL), all of which fell 3% to 5% ahead of the open. Bitcoin fell about 17% in November, finishing the month down 28% from October's record high. Lack of interest in Bitcoin often suggests risk-off sentiment on a broader level.
 

Shares of other stocks considered "risk-on" including Rigetti Computing (RGTI), Oklo (OKLO), Kohl's (KSS), and others also fell 1% to 3% in the early going.

Gold (/GC) rose 0.8% this morning as it appears some money may be rolling out of crypto and into gold. That's a trend to continue watching because when crypto descended last month, it translated into pressure on tech stocks.

Nvidia (NVDA), which fell 12% in November amid competitive concerns despite solid earnings and guidance, fell 1.8% ahead of the open to start December. The company announced a strategic partnership today with Synopsys (SNPS) that involves Nvidia investing $2 billion in Synopsys' stock. Synopsys rose 7.7% early today.

Marvell Technology dropped 2% early today ahead of earnings tomorrow afternoon. Last time Marvell reported, back in late August, the company's outlook disappointed investors, sending shares down double digits. One concern was what the firm called "lumpiness" in demand from cloud providers, CNBC reported at the time. 

Shares of other AI-related stocks including Intel (INTC), Meta Platforms (META), Palantir (PLTR), Advanced Micro Devices (AMD), CoreWeave (CRWV), and Super Micro Computer (SMCI) all fell in early trading amid the risk-off sentiment.

Traditionally defensive staples stocks including Coca-Cola (KO), Walmart (WMT), Procter & Gamble (PG), and PepsiCo (PEP) were among the few large stocks to rise ahead of the open.

Chevron (CVX) climbed 0.7% early today after being upgraded to Buy from Hold with a $169 price target by HSBC.

From a breadth perspective, seven of 11 S&P 500 sectors had 50% or more of their shares trading at or above their 50-day moving averages by midday Friday, with leaders including health care, utilities, energy, materials, and financials. Cyclical and rate-sensitive sectors are mixed in terms of breadth. Market breadth can help investors gauge strength or weakness.

Over the weekend, China's official NBS Manufacturing PMI rose to 49.2 but remained in contraction below 50 for the eighth straight month. New orders and foreign sales remained weak. 

U.S. Black Friday sales rose 9.1% year over year to a record $11.8 billion in online spending, according to Adobe Analytics. Today is Cyber Monday.

The NYSE advance/decline measure (blue and yellow line, lower chart) rallied last week to approach 13,000, after dipping to 6,500 earlier in November. This market breadth indicator is a simple calculation—the number of advancing stocks less the number of decliners—and is used to gauge technical health. The S&P 500 index (SPX—green and red candlesticks) was also in bounce-back mode last week, gaining more than 3% to edge into positive territory for the month.