K-Shaped Economy and Circular AI Trade Worries Keep Wall Street Enthusiasm In Check

Barry Adams
17 Nov, 2025
New York City

Wall Street indexes rested on Monday following choppy trading in the previous week as investors remained cautious for the second consecutive week. 

High-flying stocks faced another wave of selling as investors recalibrated their risk stance, retreated from the Fed's rate cut at the next meeting, and rotated to defensive stocks. 

This week investors await the resumption of the release of U.S. government data and key earnings from leading retailers and tech companies. 

The U.S. government reopened after a record-long shutdown near the end of last week, and the Bureau of Labor Statistics is scheduled to release September's nonfarm payroll data on Thursday. 

However, government agencies may take some time to catch up with the backlog of releases; market uncertainty may persist. 

Last week, global markets struggled to adjust to receding risk appetite amid stretched AI valuations and ongoing international trade uncertainties. 

The reopening of the U.S. government supported market sentiment, but the elevated U.S. debt, weakening consumer confidence, and resurgent inflationary pressures kept investor enthusiasm in check. 

Moreover, the weakening job market conditions supported the case that the U.S. economy may be experiencing recessionary conditions in several sectors. 

Investors' expectations for rate cuts in early December may come under additional pressure as several Fed officials this week are scheduled to offer their views on the economy, inflation, and labor market. 

Meanwhile, housing starts, completions, and building permit data are likely to show sustained construction activities in the South and the West regions. 

The Trump administration was forced to roll back tariffs on several food items after promising for months that import taxes are paid by suppliers in foreign countries. 

The continued rise in food prices has forced middle- and lower-income families to limit spending to basic items, while the top 2% of families ramp up spending on luxury items and experiences. 

A narrow segment of the population and very large businesses are driving the so-called K-shaped economy and generating fewer new jobs. 

On the earnings front, investors are awaiting the releases from Nvidia, Walmart, TJX, Home Depot, Lowe's, Target Corp., Palo Alto Networks, Williams-Sonoma, Gap, Macy's, Ross Stores, Medtronic, Copart, and Intuit.