The market rally has stalled; now what?

A not-so-funny thing happened to the big rally last week that's kept Wall Street enthralled since April.

The rally stalled.

It wasn't supposed to stall. The conventional wisdom is that stocks should rise nicely in November and December so that the Standard & Poor's 500 Index ends 2025 at 7,000 or higher. That, helped along by lower taxes and less regulation, has been the Wall Street game plan since Donald Trump's 2024 win over Joe Biden.

The S&P 500, however, closed Friday at 6,658.94, up slightly on the day but down 1.63% for the week. The weekly loss was the biggest since April.

Related: Stocks & Markets Podcast: The Next Market Catalysts With Noah Weidner

Futures trading late Sunday suggests stocks, especially tech stocks, will open higher on Monday, in part because of a proposal to reopen the government.

The proposal includes appropriations for military housing, the Agriculture Department and the Executive Branch. It does not include continuing to subsidize Affordable Care Act. There is a proposal to pay taxpayers directly to buy their own health care. Details, however, are sketchy at best, and the idea's not expected to be in the vote. It's also not clear if the idea would even pass the Senate.

Plus, the House of Representatives would have to be called back into session to approve the bill.Jobs seekers at a Florida jobs fair. GettyJoe Raedle/Getty Images

So, the situation is only slightly clearer than Friday when reports the government might reopen surfaced in the afternoon and trimmed the day's declines.

The market decline is modest at best

Friday's close left the S&P 500 down 2.8% from its 52-week high, reached on Oct. 29. (The Nasdaq Composite is off 4.2% from its peak, reached the same day.) These are not monumental declines, and the stall may prove to be nothing more than a blip that ends in short order.

All of the major averages are down so far in November, however.

Here's a striking point: The major indexes and many key stocks (think Morgan Stanley, Bank of America, Walmart and Nvidia) all hit 52-week highs more or less at the same time  — and stopped. That's called resistance.

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If you look at the 11 S&P 500 sectors, most hit their 52-week highs in the last week of October (or Monday Nov. 3 for the S&P 500 Consumer Discretionary Sector, a group that includes Tesla and Amazon.)

In addition to the indexes and the S&P 500 sectors, five of the Magnificent Seven stocks hit 52-week highs between Oct. 29 and Nov. 3. Amazon's 52-week high came on Nov. 3, the first trading day of the month.

Story Continues

And then came the selling. The Nasdaq Composite and Nasdaq-100 indexes fell more than 3% each for the past week. The Dow Jones industrials closed up 75 points on Friday to 46,987 after falling as many as 416 points after the open. The Dow, however, was down 1.2% on the week.

By Friday, Amazon had dropped 5.5% from its $258.60 peak.

Though not technically a Mag 7 stock, Palantir Technologies fell 14.3% between Monday and Friday but remains one of the year's high flyers, up 135%.

Related: 4 great indicators to help investors survive market turmoil

Some stocks had hit their peaks earlier.

Facebook-parent Meta Platforms hit its peak on Aug. 15 and is off 21.9% since. It's still up 6.2% in 2025. Tesla hit its 52-week high of $488.54 on Dec. 18, 2024. The shares have doubled from their April low, but they fell 5.9% this past week and are still trading 12.1% below that 2024 peak.

Why the big gaps? Concern about the companies' prospects. Many investors aren't buying into Meta's arguments it needs to spend $70-billion-to-$72-billion on capital expenditures this year and a "notably larger" amount in 2026 with no clear description of how it all affects the bottom line.

And in Tesla's case, there are many questions:

Will Tesla's fourth-quarter auto sales show the same growth as they did in the third quarter? How will Tesla adjust to the impact that CEO Elon Musk's huge new contract and his political activities had on sales this year? What are the rollout plans and financial projections for its self-driving Robo taxi. When will company start selling its personal robots? Will Tesla pivot to become a pure artificial intelligence company? How will that affect financial results?

Related: Bank of America reconsiders S&P 500 targets

How will the market use the stall?

The stall has not yet morphed into something ugly. Becoming ugly  — meaning dangerous  — takes time. The 2008-2009 crash came after three years of near-constant gains that made many investors complacent.

Many money managers (and followed by big passive funds) will see a pullback as an opportunity to buy. The question they should ask themselves if if they can afford to be confident.

All this assumes:

The government reopens. There are no surprises, like a big business collapse. The terms of a deal are grudgingly acceptable to all.

If so, you'll see a stampede into AI stocks and stocks of companies that will be in the forefront to use the technology. If interest rates can drop, you'll see more housing activity.

But ugly will not stop lurking.

Related: JPMorgan updates stock market outlook for 2026

This story was originally reported by TheStreet on Nov 10, 2025, where it first appeared in the Markets section. Add TheStreet as a Preferred Source by clicking here.

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