November 2025 Market Recap

Here are the latest market insights from the Goldman Sachs Wealth Management Investment Strategy Group (ISG). 

It was a choppy month for equities. Early on, markets rebounded ahead of a resolution to the US government shutdown, but by late November investors pulled back as expectations for a December Fed rate cut faded and tech stocks declined.  

Even so, the market resumed its upward trend in the final week of the month as third-quarter earnings continued to paint a constructive picture.

Here’s a recap on what happened in the market and economy.

The markets: corporate earnings continue to climb 

For the third consecutive quarter, S&P 500 earnings posted double-digit growth of about 13.5% year on year, driven by both sales and margin expansion. Over the month, the S&P 500 delivered a mildly positive return of 0.2%.

Elsewhere, the MSCI EAFE returned 0.6%, while MSCI Emerging Markets fell by 2.4% after a strong recent run.

In fixed income, performance was mixed in November. The 10-year US Treasury yield was broadly flat. The data void caused by the federal government shutdown first led markets to price out a December cut, only to price it back in later in the month after several Federal Open Market Committee (FOMC) members signaled openness to further easing.

These factors led the dollar index to reverse the gains from previous weeks. On the month, the US Dollar Index (DXY) was down -0.4%.

The economy: December interest rate cut as expected

After 43 days of shutdown, the US government reopened on November 13. This allowed federal employees to return to work, government agencies to reopen, and some economic data to be released with delay.

In November, ISG received the September nonfarm payrolls (NFP), which—after a series of weak prints over the summer—surprised to the upside, rising by 119,000. The increase was broad-based, pointing to a still balanced, albeit soggy, labor market.

ISG also received September retail sales, which fell after two consecutive months of strong growth. Altogether, the latest data are consistent with US economic growth of about 3.5% in the third quarter.

While the US data picture remains incomplete, ISG forecasts growth to slow in the final quarter of the year, driven by the shutdown and a decline in real labor income as inflation is set to pick up and the labor market remains soft.

As expected, the FOMC cut the policy rate by 25 basis points at the December meeting, with two hawkish and one dovish dissent. Fed Chair Jerome Powell noted the policy rate has now entered the broad range of what FOMC members consider to be neutral, so the bar for further cuts is rising.

In 2026, ISG continues to expect two additional cuts, reaching a terminal rate of 3.00%-3.25%, a view that is motivated by lingering labor-market concerns. Yet, given the divergent views on the committee, risks to ISG’s call are elevated.

Looking ahead

The European Central Bank, the Bank of England, and the Bank of Japan will all hold monetary policy meetings in mid-December, and China recently held the Central Economic Work Conference, which sets the economic growth target and policy tone for 2026. US economic data will come thick and fast as the backlog from the government shutdown is cleared.