Healthy correction?

November 25, 2025

Tempo di lettura: 3 mins

After climbing 17% year to date through late October, the S&P 500 declined 5% through November 20. We believe the market was due for a healthy correction. While further downside is possible, it would not concern us.

Ingrandire

After reaching a new all-time high on October 28, the S&P 500 declined 5% through November 20, leading to concerns of a renewed correction. We believe the market was due for a healthy correction and while further volatility may persist, additional downside would not concern us.

History shows that markets don’t move in a straight line, and drawdowns are normal. Since 1946, the S&P 500 has experienced a median annual correction of 11%.

Additionally, we do not believe we’re heading for a bear market or imminent recession, and we see the latest decline as more technically driven rather than a change in fundamentals or a more negative outlook. In 2026, we expect economic growth near 2% and earnings growth to continue to broaden beyond the tech sector, which should support equity performance. Therefore, staying invested and weathering the downside is critical for capturing potential upside.

Chart of the week | Macroeconomico

Markets since iran conflict

Markets are reacting to the Middle East conflict with sharp moves across asset classes, signaling broad risk repricing and shifting safe haven behavior. While volatility is elevated, fundamentals like earnings growth continue to support our constructive outlook.

Chart of the week | Macroeconomico

Signals from spreads

Credit spreads have risen yet remain historically low, reinforcing our view that the oil shock is likely temporary — not a driver of long-term growth concerns.

Chart of the week | Macroeconomico

Dollar strength: what does it mean for markets?

Geopolitical tensions have lifted oil prices, sent U.S. stocks slightly lower and driven flows into the safety of the U.S. dollar, which has strengthened versus peers. While a weaker dollar previously supported international equity outperformance, dollar stabilization now suggests that tailwind is fading, underscoring the importance of diversification across regions and asset classes.

Chart of the week | Macroeconomico

Returns after oil spikes

The Strait of Hormuz, which moves about 20% of global oil, has seen many ships that normally travel through it curtail their activity. Consequently, WTI oil was up over 36% in the five days after the oil supply shock began. Yet equities barely budged, signaling a temporary supply shock, not a larger crisis. Historically, after similar price spikes equities tend to move higher while oil prices decline — further evidence for avoiding emotion-driven investing.