A look back at global markets in November, as renewed concerns over AI-driven valuations, uneven economic momentum across regions and shifting central bank expectations combined to drive heightened volatility and sharper divergences in equity and bond returns.

The month in summary:

November saw elevated volatility across global markets as concerns about AI-linked valuations resurfaced at the same time that worries about the levels of economic growth in Europe and Asia persisted. Shifting expectations for central bank policy amplified the divergence in regional performance. Investors favoured more defensive areas, while tech-oriented names faced broader pullbacks.

Global equities

Throughout November 2025, global equity markets were influenced by growing concerns about the elevated valuations of technology and AI-related stocks, which account for a significant share of major indices. Investors became increasingly cautious amid signs of stretched pricing in leading tech firms, particularly those exposed to artificial intelligence (AI). Those concerns prompted a shift towards more defensive sectors like healthcare and consumer staples. While broader economic uncertainty remained in the background, investor attention was primarily centred on how high-growth segments might adjust to changing interest rate expectations and moderating earnings momentum. This dynamic drove notable sector rotation and contributed to divergence in performance across regions and sectors.

US

The US equity market, as measured by the S&P 500 Index, ended November relatively flat after a volatile month of trading. Expensive valuations in the technology sector—particularly among AI-related stocks—remained a key concern, with these worries resurfacing even after the brief optimism following a strong earnings report from AI-chipmaker Nvidia. Additional pressure came from mounting labor-market concerns, including a private-sector employment report showing an unexpected loss of 32,000 jobs and significant small business layoffs. That fuelled macroeconomic uncertainty. The US government shutdown, which continued into early November, heightened volatility by delaying the release of essential economic data like the official nonfarm payrolls report.

Market sentiment swung sharply, briefly reaching “extreme fear” levels and contributing to a mid-month selloff. However, optimism returned as moderating inflation data increased expectations that the Federal Reserve (Fed) would cut interest rates in December. Defensive and interest-rate-sensitive sectors benefitted against this backdrop, while there was a notable sector rotation as investors shifted away from megacap tech stocks towards healthcare, energy and regional banks. Despite this rotation, the US market continues to be dominated by a handful of megacap stocks in the technology sector, and volatility may persist until there is sustained evidence that the market is broadening.

Eurozone

Eurozone shares had a volatile start to November but rebounded by month end, with investor sentiment buoyed by increasing expectations of a Fed rate cut. Financials, Healthcare and Communications Services were among the best-performing sectors. Financials benefitted from stronger bank earnings and improved macroeconomic expectations, while Communications Services continued to realize gains from resilient digital advertising revenues.

Defensive sectors generally outperformed as investors sought stability amid ongoing global volatility and concerns around high-growth stock valuations, especially within technology and AI-related segments. These concerns contributed to a rotation towards value stocks and more stable earnings sectors. Manufacturing activity remained subdued across the region, and particularly in Germany and France. Still, overall business activity in the Eurozone grew, led by a solid recovery in services, which helped offset ongoing manufacturing weakness.

Employment continued to increase modestly, with the services sector maintaining hiring momentum even as manufacturing firms reduced staff. Third-quarter GDP growth was confirmed at a slight but positive gain of 0.2% quarter-over-quarter. That suggested a resilient economy despite ongoing challenges. Input costs rose at the fastest pace in several months, driven by renewed pressures in both manufacturing and services, though the rate at which firms increased their selling prices eased to a multi-month low, particularly in services. Against this backdrop, the European Central Bank is widely expected to leave its key interest rate unchanged at its December meeting.

UK

The performance of UK equities in November 2025 was helped by a pullback in gilt yields and a softer pound that provided support for large, globally oriented companies. Softer inflation and labor‑market data also increased expectations of Bank of England rate cuts. That helped pushed the 10‑year gilt yield lower and eased financial conditions. The November Budget was well-received, with greater-than-expected fiscal headroom and lower projected gilt issuance helping to stabilise market sentiment. Against this macro backdrop, defensively tilted areas such as healthcare and consumer staples generally outperformed more cyclical or rate‑sensitive segments.

Energy‑related stocks were underpinned by firmer gas‑linked and broader commodity expectations, even as crude prices were choppy. By contrast, domestically focused consumer and some industrial names lagged as households continued to feel the squeeze from past price rises and uncertainty about the longer‑term impact of tax and spending plans. Despite the year’s rally, UK shares still traded at a noticeable valuation discount to other major markets, which kept strategic interest from overseas investors and ongoing M&A activity in focus. Overall, local investor sentiment remains cautious, even as the fundamental backdrop has improved.

Japan

The Japanese equity market was highly volatile, with the TOPIX Total Return up 1.42% while the Nikkei 225 fell 4.12%. Globally, mounting valuation concerns in generative-AI and defense-related stocks produced sharp price swings, and uncertainty around the timing of Fed rate cuts added market-wide volatility. Domestically, rising Japan/China tensions and related travel/import headlines weighed on inbound-exposed names, including hotels and retailers. Even so, solid first-half, fiscal-year 2025 earnings released during the month underpinned the broader market. Overall, shifting expectations for US policy and AI demand, together with diplomacy-driven moves, explain the mixed but resilient performance.

Emerging markets

Emerging market (EM) equities declined in November, following strong performance in recent months, despite a weaker US dollar and declining 2-year and 10-year Treasury yields. The EM index underperformed the MSCI World Index. EM index heavyweights Korea, Taiwan and China, which have supported the EM index’s performance over much of 2025, gave back some of their recent gains amid a pull-back in technology-related stocks in the month.

Middle Eastern markets Saudia Arabia, UAE and Qatar posted losses in US dollar terms, against a backdrop of softer energy prices amid optimism about the US administration’s ability to broker a peace deal between Russia and Ukraine. The Turkish market weakened on inflation concerns, while China’s returns were broadly in line with that of the benchmark, as investors booked profits after strong year-to-date performance.

India posted slightly positive returns in US dollar terms, helped by good economic growth data and the market’s relative lack of exposure to technology. The smaller Asian markets of Indonesia, Malaysia and Philippines delivered positive returns in US dollar terms, as did Mexico and South Africa, with the latter helped by an interest rate cut, strength in precious metals prices and a medium-term budget statement that was well received by the market. Some of the European markets did well, including Greece and Hungary, while Colombia, Brazil and Chile were the leading markets in the month.

Asia ex Japan

Asia ex Japan equities declined in November, with losses concentrated in North Asia and growth-oriented sectors. China and Taiwan were among the weaker markets, as investors reduced exposure to China’s sluggish recovery and took profits in Taiwan’s semiconductor and AI leaders. Korea also slipped modestly, reflecting softer export momentum and global growth concerns. Thailand and Singapore posted declines amid weaker external demand, tourism headwinds and trade pressures, while Indonesia, Malaysia and the Philippines generated positive returns, supported by resilient domestic demand and more balanced sector exposure.

At the sector level, Consumer Discretionary and Communication Services were the laggards, weighed down by China-linked consumption and internet names, while information technology and industrials also fell because of profit-taking in AI and hardware beneficiaries and concerns over the global capex and trade cycle. Offsetting some weakness, Energy, Financials and Healthcare delivered positive returns, supported by defensive earnings profiles and, in the case of Energy, select names benefiting from firmer natural gas and energy infrastructure dynamics.

Global bonds

Events in the US — increased volatility in equities and a growing anticipation of a December Fed rate cut — drove fixed income markets during November.

Corporate bond performance was mixed, with the US outperforming other credit markets (both investment grade and high yield) but spreads widening versus Treasuries. Heavy supply in European and UK investment grade weighed on performance.

US Treasuries outperformed other major government bond markets. The yield curve steepened as yields in shorter maturities fell (given their greater sensitivity to changes in interest rates). Initially expectations for a December Fed rate cut were finely balanced, with some optimism around the end of the US government shutdown and the hawkish delivery of October’s rate cut weighing on Treasuries. However, with September’s delayed labor market report suggesting a weaker outlook, coupled with speculation that Kevin Hassett, the current director of the National Economic Council, was the leading candidate for the next Fed Chair (paving the way for additional cuts next year), the market tone shifted in a more dovish direction.

In the UK, the Budget was the focal point, with gilt yields climbing ahead of the event. However, the actual Budget announcement was well-received, as the government’s headroom against its own self-imposed fiscal rules was bigger than expected and the forecasted gilt supply was lower than expected.

Meanwhile, eurozone markets were driven by global events. High-frequency survey data signalled an improvement in the region’s growth momentum heading towards the end of the year. Although this was driven by services, with the manufacturing sector continuing to struggle — particularly in Germany.

The Japanese government bond market was the clear underperformer for the month as the government announced a 21.3-trillion-yen fiscal stimulus package. The sheer size of the package raised investors’ concerns over Japan’s already substantial debt burden.

Commodities

Commodities overall posted modest gains in November with considerable variation by sector. Precious metals were the clear outperformers, led by solid gains in silver and gold as investors continued to favor safe‑haven assets amid ongoing macroeconomic uncertainty. Gold’s advance was more measured after its strong recent run, perhaps, in part, because investors were taking profits.

Industrial metals were broadly flat to slightly negative for the month, reflecting softer global manufacturing activity, excess inventories in several markets, and weaker demand signals from China. Copper was the notable exception, with prices rising on firmer demand, ongoing supply tightness, recurring production disruptions, and strong structural support from electrification and data-centre investment.

Energy commodities overall declined, with crude oil prices falling on concerns about oversupply and uncertain demand. The main exception within energy was US natural gas, which posted meaningful gains as seasonal heating demand and strong liquefied natural gas (LNG) exports tightened supply–demand balances amid a more disciplined production backdrop. In contrast, European natural gas prices declined during the month.

Digital assets

November marked a turbulent period for digital assets, characterized by sharp market corrections driven by shifting macroeconomic expectations, the repricing of AI-related risk and the carryover from the October flash crash, when the cryptocurrency market capitalization fell by more than $1 trillion from its October peak. Bitcoin experienced one of its worst months this cycle, declining nearly 18%.

ETF and product outflows were the dominant marginal driver of price, part of which was affected by fourth-quarter seasonality, as well as funds unwinding the ETF/CME carry trade as funding rates decreased. This was compounded by a significant decline in corporate treasury buying, which supported the market over the past six months. There have been over 200 listed equities launched this year that hoard tokens on their balance sheet. Until recently, they have been trading at a significant multiple to their book value, allowing them to issue equity to purchase more tokens on the open market. That has been one of the dominant drivers of token prices during the period. These book value multiples have collapsed, leading to reduced token purchases.

The longer-term trend of institutional adoption and regulatory clarity continues to evolve. During the month, Coinbase launched the first ‘regulated’ US-based token sale since 2018 with the launch of Monad, a high-performance smart contract platform led by a former quant from Jump Trading. The launch included a heavily Know-Your-Customer-based process, including formal risk disclosures. This marks a turning point where the process was much closer to a Markets in Financial Instruments Directive-style conflict management and securities-offering standards than the ICO (Initial Coin Offering) craze from eight years ago.

Overview

Total returns (net) % – to the end of November 2025

Source: LSEG DataStream. Local currency returns in November 2025: *2.8%, **-1.2%. Past performance is not a guide to future performance and may not be repeated.

Please remember that the value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

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