Stocks Stumble As Rate-Cut Hopes Fade
On Friday, U.S. stocks whipsawed after a sharp early selloff, reflecting nerves over Federal Reserve policy, frothy tech valuations and the return of key economic data after the shutdown. The Nasdaq is down about 3.5% so far in November and has lost roughly $1.74 trillion in market value in two weeks, even as dip-buyers pushed it slightly higher into Friday’s close, according to market data from CNN.
Investors are reassessing richly priced AI and Big Tech names after months of outperformance. Oracle, which spiked 36% in September on a $300 billion OpenAI deal, has since given up those gains, while Meta, Nvidia and Palantir are all off recent highs as investors question whether huge AI-related capital spending will translate into profits. Bitcoin has slid about 25% from its October peak, signaling a broader pullback in risk appetite.
Rate expectations are adding to the tension. Following a two-meeting cutting cycle in September and October, futures now imply roughly even odds of another Fed cut in December, down from near-certainty a month ago. Fed officials, including voting members such as Boston Fed President Susan Collins, have signaled caution, while a six-week blackout in official data has left policymakers and traders effectively guessing about the economy’s true momentum.
Globally, stocks in Asia also lost ground at week’s end as doubts about a December Fed cut and stretched tech valuations weighed on sentiment, Bloomberg reported. The S&P 500 is now on track for its worst November since the Great Recession, and earlier in the fall its forward P/E briefly exceeded 23, a level seen only once in the past 25 years. That combination of elevated valuations, sticky inflation and tariff-driven uncertainty has some strategists warning that a deeper correction or even a bear market is possible if economic data continue to deteriorate.
Tariff Reversals Aim At Grocery Prices
On Friday, President Donald Trump rolled back tariffs on more than 200 food products, including coffee, beef, bananas and orange juice, in an effort to address voter anger over high grocery bills. The exemptions, which took effect retroactively at midnight Thursday, mark a sharp turn from the sweeping 10% “reciprocal” base tariff on all imports plus country-specific surcharges that began rolling out in April, according to a Reuters-based report.
The move follows recent Democratic wins in Virginia, New Jersey and New York City that highlighted affordability as a top concern. While the White House argues that inflation is a lingering “Biden hangover,” economists and even U.S. Trade Representative Jamieson Greer acknowledge that earlier tariffs pushed some food prices higher. Ground beef prices are up nearly 13% year over year and steak nearly 17%, with home-food costs rising 2.7% overall through September. Industries that won exemptions, such as grocers and food manufacturers, say cheaper inputs should help, though economists caution that retailers may keep some of the savings.
The administration is also trying to turn tariffs into a political dividend. Trump said he plans a $2,000 payment to lower- and middle-income Americans funded by tariff revenues sometime next year, even as critics like House Ways and Means Democrat Richard Neal accuse the White House of “putting out a fire they started.” The exemptions cover many foods not grown or processed domestically and are linked to a series of new or pending trade deals, including frameworks with Argentina, Ecuador, Guatemala and El Salvador that will remove tariffs on certain imports once finalized.
For households, any relief at the checkout line is likely to be modest and gradual. Import prices have in some cases already fallen as foreign suppliers absorbed part of the tariff hit, while U.S. consumer prices kept climbing, suggesting that removing the duties will not automatically translate into lower shelf prices. Economists note that overall inflation remains above the Fed’s target and that structural factors, from supply-chain shifts to labor costs, will keep living costs elevated even if bananas and coffee get slightly cheaper.
Data Drought Complicates Fed’s Next Move
On Friday, the Bureau of Labor Statistics said it will finally release the delayed September employment report next Thursday, Nov. 20, at 8:30 a.m. Eastern, ending a six-week “statistical blackout” triggered by the 43-day federal government shutdown. The shutdown, which began Oct. 1 when funding lapsed, delayed more than 30 major economic reports from agencies including BLS, the Bureau of Economic Analysis and the Census Bureau, according to coverage of the Labor Department announcement.
That gap left the Federal Reserve, businesses and investors flying blind on key indicators such as job creation, inflation, GDP and unemployment claims. The September CPI was released nine days late only because it was needed to calculate Social Security’s cost-of-living adjustment. October data will be even thinner: the household survey used to compute the unemployment rate was never conducted, and officials say there will be no October inflation report at all, leaving a permanent hole in the time series that forecasters use to gauge turning points in the cycle.
The lack of hard data has deepened divisions within the Fed over whether to cut rates again at the December 9–10 meeting. Some policymakers cite “data blindness” as a reason to pause after cuts in September and October, while markets have sharply reduced the implied odds of another move. Financial conditions have tightened as traders brace for potentially weaker labor figures when the delayed reports arrive, especially given that hiring had already slowed and inflation remained above 2% before the shutdown. Economists note that while the underlying data collection is handled by career staff and should remain unbiased, the missing October readings will complicate efforts to judge whether Trump-era tariff shocks and immigration policies are tipping the economy toward a more pronounced slowdown.
Swiss Trade Deal Eases Tariff Shock
On Friday in Zurich, the U.S. and Switzerland unveiled a framework trade agreement that slashes Washington’s country-specific tariff on Swiss imports to 15% from 39% in exchange for a pledge of $200 billion in Swiss investment in the United States by 2028. U.S. Trade Representative Jamieson Greer said the deal, which also covers Liechtenstein, will shift significant pharmaceutical, medical device, aerospace, gold and rail-equipment manufacturing into the U.S., according to details of the accord.
The agreement follows months of strain after Trump imposed one of his highest country-specific tariff rates on Switzerland in August, driving a 56% plunge in Swiss watch exports to the U.S. in September and a 14% drop in overall Swiss shipments over three months. Swiss watchmakers, precision-instrument makers and machinery firms furloughed workers and leaned on expanded government subsidies, while a strong franc and record-high gold prices added pressure. The new terms align Swiss tariffs with those for the European Union, cap future U.S. duties on Swiss pharma and chips at 15%, and secure U.S. recognition of American motor-vehicle safety standards, which Swiss industry groups say finally puts them on a “level playing field” with EU rivals.
Switzerland will also cut its own duties on selected U.S. industrial and farm products and grant duty-free quotas on American beef, bison and poultry. Economists at the KOF Swiss Economic Institute estimate the deal could lift Swiss growth above its prior 0.9% forecast for 2026 by removing a major downside risk. For the U.S., the White House argues that locking in Swiss investment and “managed” trade surpluses will help domestic manufacturing and reduce import-dependence in key sectors, even as overall tariff levels remain well above pre-April norms. Markets will now watch how quickly customs systems implement the lower rate and whether Swiss exporters, especially in luxury watches, can rebuild U.S. demand after months of disruption.
Signals To Track In A Data-Heavy Week
- Watch Thursday’s delayed September jobs report for signs that hiring has slowed materially; with no October unemployment rate coming, this print will carry outsized weight for the Fed and markets.
- Track shifting odds of a December Fed rate cut as new data arrive; futures pricing has already swung from near-certainty to roughly even odds, driving much of the recent equity volatility.
- Monitor how quickly food prices respond to Trump’s rollback of tariffs on more than 200 items like coffee, beef and bananas, which will show how much tariff relief actually reaches consumers.
- Follow implementation of the U.S.–Switzerland tariff deal, including when the 15% rate kicks in and whether Swiss firms accelerate announced U.S. investments in pharma, machinery and watches.
- Keep an eye on Big Tech and AI stocks as investors reassess expensive valuations and massive capex plans in a shakier macro environment.
