US construction spending rose by 0.3% month on month in November. This was down from a 0.5% rise in the previous month.<\/p>\n
The latest figure points to slower growth in construction outlays compared with October. The data measures monthly changes in total construction spending across the United States.<\/p>\n
Looking back, the slowdown in construction spending we saw in November 2025 was an important early signal. This data, showing a drop from 0.5% to 0.3% month-over-month growth, confirmed a cooling trend. Now in late February 2026, we see this has been followed by January’s housing starts report which showed a 4.3% decline, reinforcing the narrative of a contracting sector.<\/p>\n
This continued weakness suggests the Federal Reserve may be less inclined to raise rates further in its upcoming meetings. We should therefore consider positions that would benefit from stable or falling interest rates. This could involve buying SOFR futures or purchasing call options on longer-duration bond ETFs like TLT.<\/p>\n
For commodities, this trend points to weakening demand for industrial materials. Lumber futures, which have already fallen over 8% since the start of the year to around $510 per thousand board feet, may see further downside. We are considering buying put options on copper miners and steel producer ETFs like XME.<\/p>\n
In the equity space, homebuilder and construction-related stocks are particularly vulnerable. We have already seen the iShares U.S. Home Construction ETF (ITB) underperform the broader market this year. Buying protective puts on names like Caterpillar (CAT) or Lennar (LEN) seems prudent to hedge against further declines in the coming weeks.<\/p>\n
This pattern is reminiscent of what we observed in 2022, when declining construction activity preceded a broader economic slowdown and a pivot in Fed expectations.<\/p>\n
That historical precedent suggests we should take these early 2026 warning signs seriously. We should anticipate increased market volatility and may want to purchase VIX call options as a cheap hedge against a wider market correction.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US construction spending increased 0.3% in November, slowing from October\u2019s 0.5% rise, indicating weaker outlays growth.<\/p>\n","protected":false},"author":103,"featured_media":17021,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-50423","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/50423","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=50423"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/50423\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17021"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=50423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=50423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=50423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}