24 Nov 2025
Do consumers feel jitters? What to Know About Black Friday
As U.S. stocks navigate through a challenging November, investors are keenly awaiting indicators of resilience from American consumers, particularly with the approach of Black Friday, which traditionally marks the beginning of the holiday shopping season. This month has seen a notable pause in the stock market rally, with the S&P 500 index experiencing a decline of over 4% thus far.
Despite Nvidia Corp's impressive quarterly earnings, which typically would bolster market confidence, investors remain uneasy. The jitters stem from concerns regarding inflated stock valuations and skepticism about the returns on substantial corporate investments in artificial intelligence infrastructure, which have become a focal point for many tech companies.
Consumer spending, a crucial driver of the U.S. economy that constitutes more than two-thirds of economic activity, is now under intense scrutiny from Wall Street analysts. The upcoming trading week will be punctuated by the Thanksgiving holiday on Thursday, followed by Black Friday, a day renowned for significant discounts and shopping sprees.
This will be succeeded by Cyber Monday and various holiday promotions that extend into the year’s end. However, recent data has indicated a downturn in consumer sentiment, a situation exacerbated by the government shutdown that has hindered the release of critical economic data. Consequently, any signs of consumer spending during this holiday season could carry more weight than in previous years, making them pivotal for economic forecasts.
Chris Fasciano, the chief market strategist at Commonwealth Financial Network, emphasized the importance of early indicators from Black Friday and Cyber Monday, particularly given the current data scarcity.
"The entirety of the holiday shopping period will be an important read for where we are with the consumer and what that means for the economy," he remarked. This perspective underscores the significance of consumer behavior during this critical period, as it can provide insights into broader economic health.
Despite the recent downturn, the S&P 500 remains up by 11% year-to-date; however, it has retreated slightly more than 5% from its all-time high reached in late October. This slight decline has contributed to increased volatility in the market, with the Cboe Volatility Index (VIX) reaching its highest closing level since April, indicating heightened investor anxiety.
The performance of the stock market can significantly influence consumer spending patterns, especially among higher-income households that tend to have more investments in equities. These consumers are likely to adjust their spending based on market performance, which could have a cascading effect on the retail sector.
Furthermore, analysts are closely monitoring the effects of inflation on consumer purchasing power. With rising prices for essential goods and services, there is concern that consumers may tighten their belts during the holiday season. The potential for inflation to erode disposable income could lead to a shift in spending habits, with consumers prioritizing essential purchases over discretionary spending.
In addition, the retail landscape has evolved significantly in recent years, with e-commerce playing an increasingly dominant role. The shift towards online shopping, accelerated by the pandemic, has transformed how consumers engage with brands and make purchasing decisions. Retailers are now focusing on enhancing their online presence and offering seamless shopping experiences to attract consumers who prefer the convenience of shopping from home.
As we approach the holiday season, the interplay between consumer sentiment, stock market dynamics, and economic indicators will be critical in shaping the outlook for the U.S. economy. The upcoming shopping days, particularly Black Friday and Cyber Monday, will serve as essential barometers for assessing consumer confidence and spending behavior.
Retailers and investors alike will be watching closely to gauge the health of the consumer and its implications for the economy in the coming months. The outcome of this holiday shopping season could provide valuable insights into the broader economic landscape and influence market trends as we move into the new year.
