November was a reminder that markets rarely move in straight lines.
After a strong run through most of 2025, global equities spent the month swinging between two competing forces: concern about high valuations, especially in large US tech, and optimism that central banks may soon cut interest rates.
The result was a month that felt like a rollercoaster for investors. Here’s Andrew Prosser, Head of Investments at InvestEngine, with a breakdown of the key market movers in November. He also looks ahead to the end of 2025 and beyond.
An up-and-down month for the US
Mid-month headlines focused on one of the sharpest November drawdowns since the financial crisis.
AI-linked stocks saw a sharp selloff as worries about a potential bubble resurfaced. But a strong final-week rebound helped repair much of the earlier weakness.
By the end of the month:
- The S&P 500 finished just 0.5% lower in sterling terms
- The Nasdaq 100 was down just over 2%, as investors took profits in the year’s biggest winners
Outside the US, returns were steadier. European equities outperformed the US slightly, supported by strong results in financials and technology.
UK equities also edged higher, helped by strength in banks after regulators signalled looser capital requirements and by expectations of further Bank of England rate cuts in the months ahead.
Mixed picture across Asia
Japan and parts of developed Asia continued to lead global equity performance. China, however, lagged once again.
Renewed concerns about economic growth and the property sector prompted a pullback, coming just as valuations were starting to look stretched after a strong rally.
So far this year, the US market is still trailing other regions. A weaker dollar has held back sterling-based returns, with the S&P up around 11% year-to-date. The UK, Europe, and emerging markets are all up by a similar amount.
What happened to bonds?
Bond markets saw little volatility in November, although UK gilts received a lift from the Autumn Budget. This was positive for investors holding long-dated government bonds.
One under-reported aspect of the Budget was the decision to reduce the planned issuance of very long-dated gilts and shift slightly towards shorter maturities. This helped push 30-year gilt yields lower, supporting prices.
Overall, government bonds ended the month broadly flat, but the post-Budget rally was notable.
The Pound strengthened after the Budget
The pound had its strongest week in more than three months, with sterling-dollar rising to around $1.32 by month-end.
This was mainly down to relief that the Budget, although tax-heavy, maintained financial discipline. This was important because concerns about the UK’s fiscal outlook had weighed on sterling in the weeks before.
Currency movements matter for investors. A stronger pound reduces the value of overseas investments when converted into sterling. So, if US equities remain flat but the pound strengthens, UK investors may still see a negative return in sterling terms.
What does this all mean for investors?
For now, November looks more like a temporary pause after a strong run for markets rather than the start of a new trend.
Global equities have delivered robust returns so far this year, although leadership has become more concentrated in a narrow group of mega-cap AI stocks.
As we head into December, markets will be watching two themes closely:
- The timing and pace of rate cuts in both the UK and the US
- The strength and durability of earnings outside the mega-cap leaders
Against this backdrop, diversification remains important. Concentrated markets can deliver strong returns, but broader exposure helps manage the risks if leadership shifts.
With the year drawing to a close, it is also a good moment to step back, review your portfolio, and check whether your investments still match your risk tolerance and long-term goals.
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