Monthly Market Commentary - November 2025 in Review

FMeX
4 days ago
12 min read

Stocks end November with mixed results despite a strong Thanksgiving week rally.

November was a volatile month for stocks, but the market found its footing by the end. U.S. indexes sold off in the middle of the month, then staged a strong rebound in the final week as investors again priced in the chance of a Federal Reserve rate cut in December.

The S&P 500 finished November down about 0.6%, ending a six‑month winning streak. The Nasdaq Composite fell nearly 2% and broke a seven‑month run, while the Dow Jones Industrial Average was roughly flat and on track for a seventh straight positive month, its longest monthly streak since 2018.

All three major indexes moved higher on the last trading day of the month (Friday, November 28), extending a five‑day rally. The S&P 500 closed at 6,849.09, the Dow at 47,716.42, and the Nasdaq at 23,365.69. That late strength helped offset some of the mid‑month losses, when the S&P 500 briefly fell about 5% below its October high.

Under the surface, leadership shifted. Technology stocks, especially names tied to artificial intelligence, lagged after a very strong run earlier in the year. More defensive and income‑oriented sectors, such as health care and consumer staples, drew more interest as investors looked for stability. Small‑cap stocks also participated, extending a multi‑month stretch of gains and signaling broader market participation.

Outside the U.S., developed and emerging equity markets posted mixed results. Returns were influenced by interest‑rate expectations, uneven economic growth, currency moves, commodity prices, and regional political and policy headlines.

U.S. Equity Market Review

Major index performance (as of November 28, 2025, 4:00 p.m. ET):

S&P 500: Closed at 6,849.09, down about 0.6% for the month after six straight monthly gains. The index was down as much as 5% from its October peak during the mid‑month pullback before recovering.

Dow Jones Industrial Average: Finished at 47,716.42, roughly flat in November and likely extending its monthly winning streak to seven, the longest since a ten‑month run that ended in early 2018.

Nasdaq Composite: Closed at 23,365.69, down nearly 2% for the month, breaking a seven‑month run of gains despite leading the late‑month rally.

Russell 2000: The small‑cap index gained about 0.8% in November, outperforming large‑caps and reflecting renewed interest in more domestically focused companies.

Sector leadership shifts

November saw a clear rotation away from high‑growth technology toward more defensive and value‑oriented areas.

Technology: After strong performance through October, technology was among the weaker sectors in November. Investors questioned AI‑related valuations and reacted to company‑specific issues, leading to profit‑taking.

Financials: Banks and financial firms showed relative strength as markets priced in a backdrop of economic stability and a more “normal” interest‑rate path over time.

Health care: Health care stocks benefited from their defensive nature and relatively attractive valuations, holding up better during periods of volatility.

Energy: Energy remained under pressure as oil prices declined on oversupply concerns and softer demand expectations, especially from China.

Utilities: Utilities also struggled, as rate‑sensitive sectors faced headwinds from longer‑term interest‑rate dynamics.

Overall, the shift in leadership reflected concern about stretched valuations in parts of technology and a search for value and stability in areas that had lagged earlier in the year.

Resilient but Uneven - The U.S. Economic Picture

The U.S. economy continued to show resilience in 2025, but the picture was clouded by data delays tied to the government shutdown.

GDP growth: Second‑quarter 2025 GDP was revised up to a 3.8% annualized pace, from an initial estimate of 3.3%, driven mainly by strong consumer spending and a sharp drop in imports after earlier tariff‑related buying. The first quarter had contracted by 0.6%, so the second‑quarter rebound was notable.

Third‑quarter outlook: As of late November, the Atlanta Fed’s GDPNow model estimated third‑quarter growth at 3.9%. Professional forecasters expected annualized Q3 growth in a range of roughly 1.3% to 2.7%, with consensus near 2.7%. Full‑year 2025 growth projections clustered around 1.4% to 1.7%, slower than 2024 but still above recessionary levels.

Inflation remained above the Federal Reserve’s 2% target but showed signs of moderating.

September 2025 CPI (latest complete reading): Headline CPI rose 0.3% month‑over‑month and 3.0% year‑over‑year. Core CPI, which excludes food and energy, increased 0.2% month‑over‑month and 3.0% year‑over‑year.

Drivers: Shelter, services, and tariff‑related price increases continued to support inflation, even as some earlier pressures eased. The delayed release of October CPI due to the shutdown added uncertainty about the latest trend.

Inflation expectations pulled back but stayed elevated by historical standards.

One‑year ahead: University of Michigan survey respondents expected 4.5% inflation in November, down from 4.6% in October but still high versus early 2025.

Five‑ to ten‑year ahead: Long‑run expectations eased to 3.4% in November from 3.9% in October, closer to but still above January’s 3.2% reading.

Global Market Overview

International equity markets underperformed U.S. stocks during November and reflected a more mixed growth and policy backdrop.

Developed markets: The MSCI EAFE Index (Europe, Australasia, Far East) was down about 1.4% for the month as of November 21, though it was still up 23.4% year‑to‑date. Weak European data and currency swings weighed on returns.
Emerging markets: The MSCI Emerging Markets Index declined about 0.9% through mid‑November but remained ahead of developed markets on the year, with gains of 24.8%.

A stronger U.S. dollar for much of the month created a headwind for international returns when translated back into dollars. Market moves also reflected differences in monetary policy paths and local growth trends.

Commodity markets showed a sharp split between precious metals and energy.

Gold and silver: Gold approached about $4,216 per ounce by November 28, up roughly 7.3% for the month and nearly 59% over the prior year, supported by geopolitical risk, inflation concerns, and strong demand from investors and central banks. Silver also hit record highs, with year‑to‑date gains near 90%, driven by both investment and industrial demand.
Oil: West Texas Intermediate crude traded below $60 per barrel, and Brent hovered around $76. Oil prices were down about 17% from earlier 2025 highs amid weak Chinese demand and increased supply, with “some analysts projecting an average Brent price near $60 in 2026; however, such forecasts are inherently uncertain and subject to change based on future market conditions.

Regional and International Market Performance

Regional index results pointed to notable differences across global markets.

MSCI regional indices (as of November 21, 2025):

· MSCI World ex USA: Down 3.3% for the week, up 24.2% year‑to‑date.

· MSCI EAFE: Down 3.4% for the week, up 23.4% year‑to‑date.

· MSCI Emerging Markets: Down 3.7% for the week, up 24.8% year‑to‑date.

· MSCI AC World ex USA IMI: Down 3.3% for the week, up 24.2% year‑to‑date.

Regional themes included:

· Europe: Faced growth concerns, higher energy costs, and ongoing geopolitical risks tied to the Russia‑Ukraine conflict.

· Asia: Japan showed relative strength, while China continued to struggle with real estate stress, uneven domestic demand, and policy uncertainty.

· Latin America: Performance varied by country based on commodity exposure and local politics, with Brazil showing volatility tied to commodity prices and domestic developments.

Sector Performance Details

Sector performance in November reflected a cautious tone and a tilt toward defensive positioning.

Sector Performance	Nov-25	YTD
S&P 500 Health Care Sector	+9.14%	+14.26%
S&P 500 Information Technology Sector	-4.36%	+23.67%
S&P 500 Industrials Sector	-1.01%	+16.39%
S&P 500 Materials Sector	+3.97%	+6.29%
S&P 500 Real Estate Sector	+1.84%	+2.51%
S&P 500 Consumer Staples Sector	+3.94%	+3.34%
S&P 500 Utilities Sector	+1.33%	+19.02%
S&P 500 Financials Sector	+1.74%	+10.09%
S&P 500 Communication Services Sector	+6.34%	+33.83%
S&P 500 Consumer Discretionary Sector	-2.44%	+4.59%
S&P 500 Energy Sector	+1.76%	+4.85%

Source: S&P Dow Jones Indices

For the week of November 21, 2025 (representative of the broader month):

Leading sectors:

· Communication services: Up about 6.0%, supported by company‑specific strength, including AI‑related announcements.

· Healthcare: Led the S&P 500 sectors in November, jumping 9%.

· Consumer staples: Up about 4.0%, as investors favored businesses that tend to hold up better in slower economic environments.

Lagging sectors:

· Technology: Down about 4.3%, after strong year‑to‑date gains, as investors took profits and reassessed valuations.

· Consumer discretionary: Down around 2.5%, reflecting concerns about consumer spending and the holiday season outlook.

· Industrials: Down about 1.0%, tied to worries about slower global growth.

U.S. Economic and Earnings Summary

GDP and economic drivers

Revisions to earlier GDP data and real‑time estimates painted a picture of an economy that is slowing from its 2024 pace but still expanding.

· Q2 2025 GDP: Revised up to 3.8% annualized, from 3.3%, with stronger‑than‑expected consumer spending, robust business investment in intellectual property, and a large contribution from net exports as imports dropped after earlier tariff‑driven buying. Inventories pulled growth down as companies drew down prior stockpiles.

· Q3 2025 estimates: Forecasts ranged from about 1.3% to 3.9%, with many estimates near 2.7%.

Inflation breakdown

· Headline and core CPI: As noted earlier, the latest full data (September) showed both headline and core inflation at 3.0% year‑over‑year.

· Key components: Shelter remained the largest contributor, services inflation stayed sticky, and energy’s impact faded as oil prices fell. Food price increases moderated but remained above pre‑pandemic norms.

Earnings

Third‑quarter 2025 S&P 500 earnings were strong and broadly better than expected.

· Earnings growth: Blended earnings growth (actual plus estimates) reached 13.4% year‑over‑year, the fourth straight quarter of double‑digit growth and a clear improvement from the 7.9% pace expected at the start of the quarter.

· Beat rate and surprises: About 83% of S&P 500 companies beat earnings expectations, above both the 5‑ and 10‑year averages. Earnings came in roughly 6.6% above consensus, slightly below the recent 5‑year average surprise rate but in line with the longer‑term norm.

· Revenues: Revenue growth was about 8.4%, the highest since the third quarter of 2022, and 77% of companies exceeded revenue estimates. This marked the 20th straight quarter of year‑over‑year revenue growth.

Sector‑level earnings growth in Q3 2025 included:

· Information Technology: +28% year‑over‑year.

· Financials: +25%.

· Industrials: +20%.

· Materials: +17%.

· Utilities: +14%.

· Consumer Discretionary: +7.2%.

· Communication Services: ‑6.8% (driven by a one‑time tax charge at a large index constituent; excluding this, sector growth would have been positive).

· Energy: +0.3%.

· Consumer Staples: +0.8%.

Profit margins remained elevated, with the blended net margin at 13.1% in Q3, above the prior quarter, above the year‑ago level, and above the 5‑year average. If this level holds, it would mark the highest S&P 500 net margin since at least 2009.

Forward earnings guidance remained constructive. Analysts expected:

· Q4 2025: Earnings growth of about 7.5%.

· Q1 2026: Earnings growth near 11.8%.

· Q2 2026: Earnings growth around 12.7%.

· Full‑year 2025: Earnings growth of roughly 11.6%.

Valuations

The forward 12‑month price‑to‑earnings ratio for the S&P 500 stood near 22.7 in early November, above both the 5‑year average of 20.0 and the 10‑year average of 18.6. That suggests valuations remain elevated versus recent history, even as earnings growth has been strong.

Consumer and Retail Data

Consumer sentiment

Consumer confidence deteriorated in November even as spending held up.

· University of Michigan Consumer Sentiment Index: Fell to 51.0 in the final November reading from 53.6 in October, the second‑lowest reading on record and down 29% from a year earlier.

· Current Conditions Index: Dropped to 51.1, the lowest level in the survey’s history.

· Expectations Index: Ticked up to 50.9 from a very weak preliminary reading but remained more than 30% below year‑ago levels.

Key drivers of weaker sentiment included the extended government shutdown, the continued drag of high prices even as inflation slows, concerns about a softer labor market, and market volatility.

Retail sales

The latest detailed retail sales data, for September 2025, pointed to slower but still positive spending.

· Headline sales: Up 0.2% month‑over‑month, versus 0.6% gains in both July and August, and below expectations for 0.3% growth. Year‑over‑year, total sales were up 4.3%, with 4.5% growth for the third quarter versus the same period in 2024.

· Core retail sales (excluding autos, gas, and building materials): Down 0.1% month‑over‑month, the first decline after several months of gains.

Category details included:

Nonstore (e‑commerce): ‑0.7% month‑over‑month; still up 6.0% year‑over‑year.
Clothing and accessories: ‑0.7% month‑over‑month.
Electronics and appliances: ‑0.5% month‑over‑month.
Sporting goods: ‑2.5% month‑over‑month.
Gasoline: +2.0% month‑over‑month, driven mainly by prices.
Food services and drinking places: +6.7% year‑over‑year.

The data suggested that consumers were becoming more selective after strong back‑to‑school spending, possibly to preserve room for holiday purchases.

Spending patterns also differed by income level, according to work from the Bank of America Institute.

Lowest‑income households: +0.6% year‑over‑year spending growth.
Middle‑income: +1.6%.
Highest‑income: +2.6%.

This gap underscored the pressure high prices place on lower‑income households and the support wealth effects can offer to higher‑income groups with stock market exposure.

Housing

Housing data for September and October was limited due to the shutdown, but available signs pointed to ongoing affordability challenges.

Pending home sales: Showed mixed regional trends, with gains in the Northeast and South and declines in the Midwest and West.
Home prices: Stayed elevated in many major markets. The UBS Global Real Estate Bubble Index identified Miami, Tokyo, and Zurich as markets at highest bubble risk, with Miami ranking at the top in 2025.
Realtor confidence: The National Association of Realtors reported that elevated mortgage rates and low inventory continued to weigh on buyers, especially first‑time and lower‑income households, even as rates eased somewhat from earlier peaks.

Manufacturing and Industry Indicators

Regional Federal Reserve surveys showed a cautious tone across manufacturing.

Common themes included:

Production: Modest growth in some regions but contraction in others, influenced by industry mix and export exposure.
New orders: Generally weak, indicating softer demand for manufactured goods.
Employment: Flat to slightly lower in many regions as firms hesitated to hire.
Outlook: Business leaders cited uncertainty about tariffs, demand, and the impact of the shutdown on data as reasons for a cautious six‑month view.

Select regional highlights:

Dallas Fed: Mixed production results, with energy‑linked industries hurt by lower oil prices but some benefit from reshoring and supply‑chain shifts.
Richmond Fed: Soft new orders and shipments, with customers slower to commit to large orders.
Philadelphia Fed: Modest improvement from earlier weakness but still below levels that would signal strong expansion; input cost pressures eased but remained above pre‑pandemic norms.

Business sentiment surveys, including the Atlanta Fed’s Business Inflation Expectations survey, showed that companies still expected higher costs ahead, with tariffs and wages playing a large role. Many firms planned to invest in AI and intellectual property, while being more careful about investing in traditional manufacturing capacity. Pricing power varied by industry, depending on how sensitive customers were to higher prices.

Market Outlook Considerations

As November ended and December began, several themes stood out for investors.

Federal Reserve policy: Market pricing suggested an 80%–85% chance of a 0.25% rate cut at the December 17–18 Federal Open Market Committee meeting, down from about 95% a month earlier. The Fed’s path will depend on incoming inflation and labor data and how growth evolves.
Inflation trend: Inflation remains above the Fed’s target, and October’s missing data due to the shutdown created uncertainty. Upcoming releases will be watched closely.
Consumer resilience: There is a clear gap between weak sentiment readings and relatively solid spending. If negative sentiment persists, it could eventually show up in slower consumption.
Earnings durability: Strong third‑quarter results set a high bar for future quarters. Investors will focus on whether revenue growth and high profit margins can persist if economic growth cools.
Sector rotation: The move away from technology leadership toward more defensive areas could mark a longer‑term shift or simply reflect year‑end positioning.
Global influences: Currency moves, international equity performance, and geopolitical developments remain important drivers for U.S. sectors and overall risk appetite.

Seasonally, December has often been a positive month for U.S. equities, with the S&P 500 historically posting gains in about 7 out of 10 years since 1980 and averaging a roughly 1.2% return. Whether a similar “Santa Claus” pattern appears in 2025 will depend on how the factors above develop.

Author: FMeX

Published:12/4/2025

Data Sources and Methodology

This commentary relies on data from multiple authoritative sources to provide comprehensive market and economic analysis. Index performance data is sourced from S&P Dow Jones Indices, NASDAQ, and Russell Investments. Economic indicators, including GDP, inflation, and employment metrics, are derived from the U.S. Bureau of Economic Analysis and Bureau of Labor Statistics.

Corporate earnings data and estimates are provided by FactSet Research Systems and LSEG (formerly Refinitiv). International market performance data comes from MSCI Inc. Regional manufacturing survey data is sourced from the respective Federal Reserve Banks, including Richmond, Dallas, Philadelphia, New York, and Kansas City.

Consumer sentiment data is provided by The Conference Board. Housing market statistics are sourced from the National Association of Realtors and Realtor.com. Federal Reserve policy information comes from official Federal Open Market Committee statements and meeting materials.

Key Data Sources

Market data: S&P Dow Jones Indices, NASDAQ. Russell Investments, MSCI Inc., FactSet Research Systems.

Economic data: U.S. Bureau of Economic Analysis (BEA), U.S. Bureau of Labor Statistics (BLS), Federal Reserve Banks (Atlanta, Philadelphia, Richmond, Dallas, San Francisco, New York), U.S. Census Bureau.

Survey data: University of Michigan Surveys of Consumers, The Conference Board.

Corporate data: FactSet Research Systems, LSEG I/B/E/S.

Housing data: National Association of Realtors, UBS Global Real Estate Bubble Index.

Commodity data: CME Group, Energy Information Administration, and other commodity exchanges.

This Monthly Market Commentary is for informational and educational purposes only and is not investment advice or a recommendation to buy or sell any security. The information reflects historical data and analysis as of November 30, 2025, and may change without notice.

Past performance does not guarantee future results. All investments involve risk, including loss of principal. Diversification does not ensure a profit or protect against loss in declining markets.

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