Monthly Market Update – November 2025

November 2025 may not have looked especially eventful if you focused only on the headline index returns, but the month featured plenty of meaningful shifts under the surface. The commentary that follows builds on the key observations above, taking a closer look at how those market moves unfolded and what they meant across equities and fixed income.

Equities: Quiet finishes, volatile paths

Across major developed markets, broad equity indices ended November roughly flat to mildly positive for the month, with the S&P 500 and other large benchmarks posting only small gains. That relatively subdued monthly outcome masked a choppy trading environment, as several commentaries noted that heightened day‑to‑day price swings contrasted with the modest moves seen in month‑end index levels.

Intraday and intraweek swings were driven by changing expectations around the Federal Reserve’s policy path, markets’ response to the temporary U.S. government shutdown and subsequent reopening, and ongoing debate about whether elevated valuations in artificial‑intelligence (AI)-linked and other mega‑cap technology names were still justified. As a result, even though the month‑end snapshots of the indices looked uneventful, the journey through November reflected a market continually reassessing risk, growth and interest‑rate assumptions.

Leadership rotation: Beyond mega‑cap growth

Beneath the calm surface of the major benchmarks, leadership within the equity market continued to evolve, with several November recaps pointing to a shift away from the narrow group of mega‑cap growth and AI‑linked technology stocks that had previously dominated returns. Large‑cap growth and mega‑cap technology generally lagged the broader market over the month as profit‑taking, valuation concerns and reassessment of AI‑related earnings expectations weighed on these segments.

By contrast, value‑oriented stocks and smaller‑capitalization names generally fared better in November, with multiple sources highlighting stronger results in mid‑caps, small‑caps and more cyclically oriented sectors. Equal‑weighted versions of major benchmarks and value‑tilted indices outpaced traditional cap‑weighted, tech‑heavy measures, indicating that performance was more broadly distributed than in periods dominated by a concentrated set of large technology and growth companies. This broadening of leadership suggests that investors are increasingly looking beyond a handful of mega‑cap names and are willing to re‑engage with segments that had previously lagged, such as cyclicals, financials and select industrials.

For diversified equity portfolios, this shift in leadership is notable because it illustrates how different styles—growth versus value, large cap versus small cap—can move in and out of favor over time, even when overall index levels do not change dramatically. November’s pattern highlighted the importance of what’s happening within the index, not just the headline return number investors see at month‑end.

Fixed income: Lower yields and rising rate‑cut expectations

In fixed income markets, November was generally supportive for bond investors, as long‑term government bond yields drifted lower over the course of the month. The decline in key sovereign yields, including the U.S. 10‑year Treasury benchmark, helped bond prices and improved total returns for many high‑quality fixed‑income segments.

This move in yields reflected growing confidence that inflation is continuing on a moderating, or disinflationary, path, with cooling price pressures cited in several November fixed‑income and macro commentaries. At the same time, derivatives markets and strategist surveys increasingly pointed to expectations that the Federal Reserve would deliver further policy easing after the October rate cut, with attention focused on the mid‑December meeting and the broader 2026 rate path. While the precise timing and pace of any additional cuts remain dependent on incoming data, November’s bond market behavior signaled that investors see the next major move in policy as further easing rather than renewed tightening.

These developments had several implications for the broader environment. Lower long‑term yields eased some pressure on interest‑sensitive areas of the economy, and improved financing conditions at the margin for both households and businesses. The combination of moderating inflation indicators and declining yields also improved the risk‑return profile for high‑quality bonds relative to earlier stages of the tightening cycle, when yields were rising and prices falling.

Putting November in context

Taken together, November 2025 can be seen as a transitional month in which markets moved from a narrow, mega‑cap‑led pattern of returns toward a more broadly shared leadership backdrop, while simultaneously adjusting to a changing interest‑rate outlook. On the surface, equities did little, with broad indices recording only modest gains despite notable swings; underneath the market appeared to be rebalancing its preferences and positioning ahead of potential policy shifts. In fixed income, the drift lower in yields and growing conviction around disinflation and future rate cuts framed November’s narrative as one of gradual transition from a highly restrictive stance toward a more supportive policy environment.

November’s developments underscored how quickly market narratives can evolve, even when headline returns appear muted. Thank you for your continued trust, and please reach out to your advisory team with any questions.