November 2025 Market Update

Overview

Global markets experienced a period of consolidation in November, with the benchmark index slipping 0.6% over the month.

The end of the longest US government shutdown on record lifted sentiment, pushing major markets to leap to fresh highs. The rally faded toward the end of the month, however, as investors took profits and concerns resurfaced about high valuations, particularly in AI-related stocks.

Valuation concerns were especially acute in US megacap AI names, with the NASDAQ 100 trading near 27x forward earnings versus a 10‑year median of 17x. This widening gap, coupled with early signs of slowing cloud investment by big tech firms, has heightened investor unease.

The UK Budget was another key event.

Chancellor Reeves announced £26bn in tax increases for the 29/30 fiscal year to help fund higher welfare spending and reduce the fiscal deficit.

Markets welcomed the larger buffer against fiscal rules, however much of the tightening is back-end loaded, leading to a mixed reaction in UK assets. Investors interpreted the back-loaded fiscal tightening as a signal that near-term gilt issuance pressure may remain elevated, which contributed to modest upward pressure on UK yields.

Elsewhere, debate continued over the outlook for unemployment (with four-year highs of 4.4% and 5.0% in the US and UK respectively) and interest rates.

Full update below…