Monthly Market Review — November 2025

Equities

Global equities (+0.1%) were flat in November, concealing sharp intra-month volatility. A tech-led sell-off, driven by elevated valuations and intensifying competition in the semiconductor industry, gave way to a thinly traded US holiday rebound that lifted markets at the end of the month. Policy rates remained predominately steady as the European Central Bank (ECB) and Bank of England (BOE) left interest rates unchanged. However, easing UK inflation stoked expectations of a December cut, while Chancellor Rachel Reeves’ supportive Autumn Budget buoyed sterling and compressed gilt yields. Despite firm US core inflation, markets priced in a higher probability of a rate cut by the US Federal Reserve (Fed) amid signs of a softening labor market. Japan’s economy contracted at a 1.8% annualized pace in the third quarter, pressuring the Japanese yen, while China’s economy was jolted by the slowest growth in industrial output and retail sales in over a year, fueling speculation of further fiscal stimulus. Gold hovered near record highs above US$4,000/oz, while Bitcoin slid more than 25% from its peak.

US
US equities (+0.2%) were volatile but ended higher for the seventh consecutive month, registering a 17.8% gain year to date. Stocks rallied on light Thanksgiving holiday trading volume after heavy losses during the month were amplified by fears of a potential AI bubble, Fed policy uncertainty, and the prolonged government shutdown. Value stocks markedly outperformed their growth counterparts, as anxiety about lofty valuations of tech shares and massive AI spending dragged the tech sector down and shifted capital toward value/cyclical areas of the market. Following the end of the longest US government shutdown in history, markets eagerly awaited the release of a backlog of economic data that is critical to the assessment of the economy. Members of the Fed are divided on the appropriate level of interest rates amid considerable uncertainty about inflation and the labor market; however, the probability of a 25 basis points (bps) interest-rate cut in December surged to around 85% after two top Fed officials expressed their support for lower rates. Third-quarter corporate earnings were significantly better than anticipated. According to FactSet, with 95% of companies in the S&P 500 Index having reported results, 83% reported better-than-expected earnings. The blended year-over-year earnings growth rate for the index stood at 13.4%, well above the 10-year average of 9.5%.

Due to the lengthy 43-day government shutdown, economic data from several government agencies was suspended or delayed. The unemployment rate for October will not be released, while October and November nonfarm payroll data will be released in December. In September, the unemployment rate ticked up to 4.4%, nearly a four-year high, but nonfarm payroll growth of 119,000 was more than double the consensus expectation. Initial jobless claims in November indicated that layoffs remained historically low, although an upward trend in continuing jobless claims signaled that unemployed workers are having a harder time finding new jobs. October consumer spending data was delayed, but a modest 0.2% rise in September headline retail sales suggested that consumption was more restrained after several months of robust spending. The Conference Board’s Consumer Confidence Index deteriorated to 88.7 in November, significantly below consensus expectations of 93.3, amid greater anxiety about the labor market and the economy. Lower mortgage rates and declines in home prices in some areas helped to boost pending and existing-home sales in October, although a softening labor market and stretched consumer finances continued to pose headwinds for the housing market.

The manufacturing sector continued to contract modestly in November, as the Institute of Supply Management (ISM) Manufacturing Index declined by 0.5 points to 48.2, below the consensus forecast of 49.0. Production expanded, but new orders dipped, and employment contracted at a faster pace. In October, the services sector expanded at the fastest pace in eight months; the ISM Services Index rose 2.4 points to 52.4, thanks to a swift rise in new orders. A rebound in demand was accompanied by signs of stabilization in employment and more pronounced inflationary pressures due to higher US import duties. The NFIB Small Business Optimism Index eased to a six-month low of 98.2 in October on less optimism about the economy and a notable 9% decline in the percentage of business owners who reported higher earnings over the last three months.

Within the S&P 500 Index (+0.2%), 8 of the 11 sectors posted positive results for the month. Health care (+9.3%) was the best-performing sector, led by pharmaceuticals (+16.4%). Communication services (+6.4%), materials (+4.1%), and consumer staples (+4.0%) also outperformed. Information technology (-4.3%) was the worst-performing sector, led lower by semiconductor & semiconductor equipment (-5.8%) and software (-7.5%). Consumer discretionary (-2.4%) and industrials (-0.8%) also lagged the index.

Europe
European equities (+1.2%) rose in November. The European Commission upgraded its 2025 eurozone economic growth forecast to 1.3%, from 0.9%, as growth exceeded expectations in the first nine months of the year. The upgrade was supported by a resilient labor market, declining inflation, and favorable financing conditions. Eurozone business activity continued to expand at a solid pace in November, as the HCOB Flash Eurozone Composite Purchasing Managers’ Index (PMI) remained near its highest level for two-and-a-half years, at 52.4. Notably, German output continued to increase, and French business activity nearly stabilized thanks to resumed growth in the services sector. Against a relatively positive economic backdrop, the central banks of the UK, Norway, and Sweden left interest rates unchanged. Annual eurozone headline inflation rose slightly to 2.2% in November, while core inflation remained steady at 2.4%. Ukraine and the US agreed on a framework deal to end the Russia-Ukraine war, but Russia’s acceptance appeared unlikely. According to LSEG, third-quarter earnings for companies in the STOXX 600 Index are forecast to increase 7.1% from a year earlier.

Europe’s manufacturing sector contracted slightly in November; the HCOB Eurozone Manufacturing PMI slipped to 49.6 as a decline in new orders signaled weaker demand. Input prices increased at the fastest pace since March, while output prices decreased fractionally. The HCOB Flash Eurozone Composite PMI revealed that activity in the services sector increased to an 18-month high in November, helping to offset a decline in manufacturing. Input costs rose sharply, while output price inflation continued to soften. The European Commission’s Economic Sentiment Indicator improved slightly to 97.0 in November, with consumer confidence stable and industry confidence declining.

In Germany (-0.2%), Chancellor Friedrich Merz’s fiscal reform faced criticism from prominent German institutes and economists for its limited impact on economic growth, as some of the country’s new debt is being used to fund ongoing expenditures rather than defense and infrastructure investments. The country’s ZEW Indicator of Economic Sentiment surprisingly declined in November, reflecting waning confidence in the government’s ability to implement effective economic policies to revitalize the economy. The UK’s (+0.5%) economy unexpectedly contracted by 0.1% in September and grew only 0.1% during the third quarter, as the dominant services sector struggled. Chancellor Rachel Reeves delivered her highly anticipated Autumn Budget with a larger-than-expected fiscal buffer of £22 billion, achieved mainly through tax hikes, to combat strained public finances. The S&P Global Flash UK PMI Composite Output Index indicated that business activity expanded at a slower pace in November due to waning momentum in the services sector. A decline in annual headline inflation to 3.6% in October bolstered expectations of an interest-rate cut by the BOE in December. In France (+0.1%), fiscal uncertainty remained heightened after Parliament rejected a 2026 budget draft, thwarting Prime Minister Sébastien Lecornu’s efforts to lower the deficit.

Pacific Basin
Pacific Basin equities (-0.2%) declined slightly over the month. In Japan (+0.6%), Prime Minister Sanae Takaichi signaled that she will prioritize economic growth and flexible spending, asserting that a strong economy is essential to sound fiscal policy. Her preference to drop the annual budget-balancing goal in favor of multiyear budgeting marks a shift toward looser fiscal policy, heightening concerns about the country’s massive public debt and worsening public finances. Japan’s cabinet approved a ¥21.3 trillion stimulus package, including ¥17.7 trillion in extra spending, to ease inflation pressures and support households. The stimulus package is the largest since the COVID-19 pandemic and includes tax cuts and fuel relief to balance voter concerns about fiscal discipline and rising debt risks. Takaichi’s focus on economic growth complicates the Bank of Japan’s (BOJ’s) path toward tighter monetary policy. However, BOJ Governor Kazuo Ueda indicated concern about the likelihood of higher inflation due to the weak yen and expressed confidence that the economy will rebound from the smaller-than-anticipated impact of US tariffs, signaling a potential rate hike in December. Japan’s third-quarter GDP contracted by 1.8% — the first decline in six quarters — as weak exports and housing investment offset flat consumer spending. Tokyo’s core inflation remained at 2.8% in November, and industrial output rose unexpectedly, reinforcing expectations of a BOJ rate hike.

In Australia (-3.6%), the Reserve Bank of Australia (RBA) left interest rates unchanged at 3.6% amid persistent inflationary pressures, a tight labor market, solid consumer spending, and a revived housing market. Deputy Governor Andrew Hauser warned that limited excess capacity and sticky inflation pose medium-term challenges to policy setting, a sign that there is less room to expand the economy without generating higher inflation. The Australian dollar and bond yields climbed after the Consumer Price Index accelerated in October at the fastest pace in seven months and above the consensus forecast, and a closely monitored measure of core inflation (trimmed mean) rose at a 3.3% annual rate, exceeding the RBA’s 2% – 3% target range. This led markets to sharply reduce the probability that the RBA will cut interest rates in 2026. Additionally, the labor market remained tight in October; unemployment fell to 4.3% and the economy added 42,200 jobs, nearly all full-time roles and double the market’s expectation.

In Singapore (-0.2%), core inflation accelerated significantly more than expected to 1.2% year over year in October, marking the largest increase since December 2024 and signaling strong economic momentum. Singapore’s Ministry of Trade and Industry upgraded its 2025 GDP growth forecast to around 4% after above-forecast growth in the third quarter, but it expects growth to slow to 1% – 3% in 2026 due to the negative impact of US tariffs on global demand. New Zealand’s (-1.2%) central bank raised interest rates by 25 bps but signaled an end to its easing cycle, as the economy showed signs of recovery.

Emerging Markets

Emerging markets (EM) equities (-1.6%) fell in November. Asia led the decline, followed by Europe, the Middle East, and Africa (EMEA), while Latin America rose.

In Asia (-2.1%), China’s (-2.5%) export-driven economy was weighed down by the negative impact of tariffs on US demand. Global exports unexpectedly fell 1.1% in October — the first decline since February — amid a 25% year-over-year drop in US exports, marking the seventh consecutive month of double-digit declines in shipments to the US. Industrial output and retail sales in October grew at their slowest pace in over a year, and factory activity in November contracted modestly for the eighth straight month. The property sector remained a key drag on the economy; property investment shrank 14.7% in the year through October, while new-home prices slid at the fastest monthly pace in a year. Taiwan (-3.0%) fell as investors grew cautious about stretched valuations in the technology sector. Nevertheless, soaring demand for technology boosted Taiwan’s exports by 49.7% year over year to an all-time high of US$61.8 billion in October, leading the government to raise its 2025 GDP forecast to 7.37%, the highest growth in 15 years. South Korea’s (-4.9%) central bank kept interest rates unchanged for the fourth straight meeting and signaled an end to rate cuts, as a slumping currency and improved consumption leave little room for policymakers to support growth without fueling inflation.

In EMEA (-2.1%), OPEC+ members agreed to raise oil output by 137,000 barrels a day in December — matching the previous month’s increase — but to halt any further output hikes in January, February, and March. Saudi Arabia (-8.3%) fell after the country’s Capital Market Authority announced a delay in reforms that will allow foreign investors to own a majority share in domestic companies. The country’s PMI climbed to 60.2 in October, its second-highest level in more than a decade, driven by robust growth in the non-oil private sector. In the United Arab Emirates (-6.6%), the non-oil private sector continued to expand in October but slowed compared to the previous month.

In Latin America (+5.2%), Brazil (+7.0%) surged after the US eliminated its recently imposed 40% tariffs on Brazilian food products, including beef, coffee, cocoa, and fruits. The country’s Finance Ministry trimmed its 2025 economic growth forecast to 2.2% from 2.3% after third-quarter GDP growth was below forecast amid very tight monetary policy. Markets anticipate that the central bank will lower interest rates early next year after lower-than-expected inflation in October, even as the unemployment rate fell to its lowest level since 2012. Mexico’s (+1.6%) central bank cut its benchmark interest rate by 25 bps, to 7.25%, and lowered its 2025 GDP growth forecast to a mere 0.3%. However, policymakers struck a cautious tone on further policy easing amid persistent core inflation, which accelerated to 4.32% in November.

Fixed Income

Market sentiment improved modestly in November following the resolution of the US government shutdown and several new trade agreements, while fixed income sectors posted mixed excess returns. Central bank policy was largely stable, with the Reserve Bank of New Zealand cutting rates by 25 bps and most other major central banks holding steady. The Bloomberg US Aggregate Index returned 0.62% for the month, slightly underperforming duration-equivalent Treasuries by 0.03%, while the Global Aggregate Index gained 0.21% in US-dollar hedged terms, outperforming government bonds by 0.03%. The Bloomberg US TIPS Index delivered a 0.18% total return, and the 10-year break-even inflation rate declined by 8 bps to 2.23%.

Most global sovereign yields moved higher. The US Treasury curve steepened, with short-term yields declining on expectations for a December rate cut, while long-term yields remained anchored by mixed macro signals and receding fiscal concerns. In Europe, German bund yields rose on persistent inflation, reinforcing the view that the ECB’s easing cycle has ended. UK gilt yields climbed early in the month due to fiscal discipline worries, then fell after the Autumn Budget provided more headroom. In Asia-Pacific, Australian yields rose sharply on higher-than-expected October inflation, and Japanese government bond yields increased after a large stimulus package raised fiscal sustainability concerns. EM yields ended broadly lower, led by South Africa’s, whose first credit rating upgrade in two decades boosted investor appetite. Latin American bonds outperformed, while select Asian markets, particularly China and Singapore, lagged.

US investment-grade corporate bonds posted positive total returns but underperformed duration-equivalent Treasuries, with industrials and utilities lagging and financials outperforming. High-yield bonds also delivered gains, led by B-rated bonds, and followed by BB and CCC. Pharmaceuticals, paper, and construction machinery were the best-performing sectors, while building materials, technology, and cable/satellite lagged. Global credit bonds underperformed government bonds as spreads widened. US dollar and sterling-denominated corporate bonds generated positive returns, while euro-denominated bonds declined. In emerging markets, local debt outperformed external debt, aided by EM currency appreciation and favorable rate movements. Agency mortgage-backed securities (MBS) underperformed Treasuries, commercial MBS outperformed, and asset-backed securities (ABS) delivered stable spreads despite Fed rate-cut uncertainty.

Currencies

The US dollar weakened against most developed market currencies, with the euro and the British pound leading the gains on UK budget relief and the Bank of England’s steady rates. The Japanese yen underperformed due to monetary policy divergence and fiscal concerns. EM currency performance was mixed; the Colombian and Chilean pesos appreciated, benefiting from attractive carry, while the Korean won weakened on structural vulnerabilities.

Commodities

Commodities declined slightly (-0.1%) in November. Precious metals and industrials contributed positively to performance, while energy and agriculture & livestock detracted.

Within energy (-1.4%), natural gas (+12.6%) surged to its highest level in years, as colder weather after the Thanksgiving holiday increased heating demand, while US liquified natural gas exports hit a record high. Conversely, gasoline (-0.7%), gas oil (-1.1%), heating oil (-1.8%), and crude oil (-3.3%) declined as markets monitored developments surrounding a potential Russia-Ukraine peace agreement, which could ultimately lead to the lifting of US sanctions. The upcoming OPEC+ meeting is anticipated to reaffirm the group’s earlier decision to pause production increases during the first quarter of 2026. Currently, global oil markets are facing oversupply due to rising production paired with relatively slow consumption growth.

Industrial metals (+1.1%) rose during the month. Copper (+3.2%) was supported by a weaker US dollar and increased optimism about a potential US-China trade agreement. Zinc (+1.2%) reached a new peak as global smelter production declined sharply and inventories were quickly depleted. Aluminum (-0.7%) dropped after Fed officials warned against further rate cuts, dampening commodity demand. Additionally, market conditions for aluminum remained tight; China is working to reduce metal overcapacity and deflationary pressures, while its new smelter projects in Indonesia face delays due to higher energy costs and stricter regulations. Lead (-2.4%) fell amid surging inventory and uncertainty about future Fed rate cuts, while nickel (-2.7%) dropped on global oversupply, mainly driven by overproduction in Indonesia. Rising demand for electric vehicle batteries is bolstering nickel’s long-term outlook, yet sluggish stainless-steel consumption continues to exert downward pressure on prices.

Precious metals (+6.9%) rallied. Silver (+17.6%) continued to soar amid expectations of a Fed rate cut and ongoing global supply concerns. Furthermore, the US added silver to its critical minerals list and may impose future tariffs on the metal, leading to robust market inflows. Gold (+5.9%) was driven higher by concerns about geopolitical and economic uncertainty, a weaker US dollar, and expectations for easing US monetary policy. Safe-haven demand and ongoing purchases by central banks provided additional support.

Agriculture & livestock (-1.0%) ended lower. Sugar (+5.7%) was driven higher by reports of lower-than-anticipated production estimates from key areas such as Brazil. Coffee (+3.7%) advanced as droughts, frosts, and unusually high rainfall in Brazil reduced yields, while surging demand in markets like China and India supported prices. Soybeans (+2.3%) were bolstered by renewed optimism surrounding a potential US-China trade agreement and stronger export sales figures reported by the US Department of Agriculture. Live cattle (-4.6%) fell on news that US tariffs on Brazilian beef will be cut by 40%. Additionally, fears about a softer US labor market and weaker consumer demand weighed on prices. Cotton (-3.3%) slipped as a decline in US stocks over most of November and weaker grain prices dampened market sentiment. Cocoa (-12.2%) was dragged lower by a robust West African harvest, delayed EU deforestation rules, and reduced manufacturer demand, which pushed prices to their lowest level in nearly two years.