Markets saw a short-lived bout of volatility in November as concerns around AI-related stocks, shifting Fed expectations, and delayed economic data weighed on sentiment. Despite the turbulence, most major asset classes stabilized by month end. For long-term investors, the month served as another reminder that disciplined allocation matters more than market noise.
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A Quick Look at November’s Markets
November delivered a brief but noticeable pullback across several areas of the market. Concerns about the sustainability of AI-driven stock gains, changing expectations for Federal Reserve rate cuts, and delayed government data all contributed to volatility.
Despite these challenges, most asset classes recovered toward the end of the month, highlighting how quickly markets can shift.
How Major Indexes Performed
- S&P 500: +0.1% in November; +16.4% YTD
- Dow Jones Industrial Average: +0.3% in November; +12.2% YTD
- Nasdaq: -1.5% in November; +21.0% YTD
- International Developed (MSCI EAFE): +0.5% in November; +24.3% YTD
- Emerging Markets (MSCI EM): -2.5% in November; +27.1% YTD
Bond markets also strengthened, with the Bloomberg U.S. Aggregate Bond Index gaining 0.6% in November and 7.5% year-to-date.
A Risk-Off Mood Takes Hold
For part of the month, investors moved away from risk-oriented assets such as technology stocks, high-yield bonds, and cryptocurrencies. Market sentiment turned as investors questioned whether AI-driven earnings growth could continue at the same pace.
AI-Related Stocks Under Pressure
AI-heavy technology companies saw their worst weekly decline since April. Many concerns centered around:
- Rising spending and debt levels
- Margin pressure
- The possibility of investor overexcitement creating a bubble
Despite this, fundamentals for some major players remained solid. Nvidia, for example, reported strong third-quarter revenue and earnings growth, helping several large tech names rebound late in the month.
Crypto Corrects Sharply
Bitcoin fell over 30% from early-October highs, briefly slipping below $85,000 and giving up its year-to-date gains before finishing November at $91,176. Crypto’s sharp swings continue to show that digital assets can be highly speculative and require careful risk management.
Bond Markets Benefit from Lower Yields
Long-term interest rates declined in November, with the 10-year Treasury yield briefly dropping below 4% before finishing the month at 4.02%. Lower rates helped support bond prices, contributing to one of the market’s strongest year-to-date bond performances since 2020.
For diversified investors, this provided welcome stability during equity volatility.
Government Shutdown Ends, But Data Gaps Remain
The federal government reopened after a 43-day shutdown, temporarily resolving the impasse but only funding operations through January 2026. Markets largely looked past the political backdrop, though the shutdown delayed key economic releases.
Delayed Jobs Report
With the shutdown ending, the long-delayed September jobs report finally arrived:
- 119,000 new jobs added
- Unemployment increased to 4.4%, the highest level since October 2021
- August jobs revised to -4,000, marking the second month of negative growth in 2025
An October jobs report will not be published, adding further uncertainty heading into year end.
Fed Expectations Shift Once Again
Because of data gaps, the Federal Reserve enters its mid-December meeting without the full economic picture. Market expectations for a December rate cut declined mid-month but rebounded later. Current expectations point to:
- A potential rate cut in December
- Another cut in April or June 2026
Consumer confidence also weakened, with the University of Michigan Sentiment Index falling to 50.3 in November, reflecting continued household concerns about prices and job security. Yet consumer spending has remained resilient.
Bottom Line
November’s fluctuations serve as a reminder that volatility is part of investing. With AI uncertainty, shifting Fed expectations, and limited economic data, markets reacted quickly—but also stabilized quickly.
For long-term investors, the month underscores the importance of:
- Diversification
- Staying focused on your long-term plan
- Avoiding emotional reactions to short-term swings
Key Takeaways
- Markets were volatile in November due to AI concerns, Fed expectations, and delayed economic data.
- Most major asset classes rebounded by month end.
- AI-related stocks experienced notable pullbacks, though fundamentals remain strong for some industry leaders.
- Bonds benefited from lower long-term interest rates.
- A government shutdown created data gaps that may complicate the Fed’s December meeting.
Frequently Asked Questions
Why were AI-related stocks so volatile in November?
Concerns about high spending, debt levels, and questions about a potential bubble triggered selling, although fundamentals for some AI leaders remained strong.
How did the government shutdown affect markets?
While markets largely looked past the shutdown, it delayed key economic data, making it harder to evaluate the economy and complicating the Fed’s policy outlook.
Are bonds becoming more attractive?
Lower long-term yields helped raise bond prices in November, contributing to a strong year-to-date performance and improving the role bonds play in diversified portfolios.
Is consumer confidence affecting spending?
Despite lower consumer sentiment readings, spending has remained resilient, supported by continued economic growth.
What should investors focus on going into year end?
Maintaining a diversified portfolio, avoiding emotional decision-making, and keeping long-term goals in sight are key as markets navigate uncertainty.
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Disclosure
This material is for informational purposes only and is not intended as investment, tax, or legal advice. Investing involves risk, including possible loss of principal. Consult a qualified professional regarding your personal circumstances.