Monthly Market Commentary – November to December 2025

By Dennis Karpenko, CFA^®

Compared to much of the rest of the year, November was a relatively muted month; the S&P 500 fell 0.1% between the end of October and midway through December. The longest U.S. government shutdown (43 days) concluded in the middle of November. Despite that, delays in data, another 25 basis point cut in early December, and uncertainty about rate cuts in 2026 have given investors a mixed outlook.

Equities

The Q3 earnings season concluded and carried forward the strong earnings from the previous quarter; over 80% of companies in the S&P 500 beat consensus earnings estimates, contributing to a return over 17% on the year for the index. Even with these earnings and revenue beats, equities have mostly been flat. Since November 1, sectors have been mixed with Healthcare up nearly 7% and Tech down nearly 4.5% - a stark contrast to the year-to-date numbers where Tech still leads all sectors with a return over 24%.

International markets have continued to be leaders in 2025, but saw somewhat of a divergence in the last few weeks. Developed international equities stayed positive (up 2.28%) while emerging markets pulled back and posted a negative 0.55% figure.

Fixed Income

Fixed income markets have largely remained flat due to the lack of U.S. economic data and uncertainty around the Federal Reserve’s approach to interest rates. Yields have fallen across the broader U.S. bond spectrum, with prices commensurately rising; U.S. Treasuries in particular led November in returns as they had the largest yield drop across broad categories. Anticipation for further Fed rate changes beyond the December cut has also contributed to a further steepening of the yield curve, as longer-dated bonds have become more attractive.

Economic Recap

On the heels of the government shutdown, economic data releases that were paused have now resumed with figures slowly coming out. These delayed data releases alongside uncertain pass-through effects of tariffs (as they pertain to consumers) create a muddled outlook for Fed policy. Odds still point to cuts in the coming meetings, but the release of economic data might sway rate-related decision-making.

The balance of the Fed’s dual mandate has also been a point of conversation as the Fed needs to consider both inflation and unemployment figures when making decisions. As inflation figures have been moving lower, the U.S. unemployment rate has climbed to 4.6%, the highest print since the fall of 2021.

Other notable economic figures:

Disclosures

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged and generally considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks, including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.