Market Watch: November 2025

Rebound Momentum and Rising Rate-Cut Expectations

Despite some volatile weeks, November ended on a positive note, led by a sharp rebound in the U.S., where a five-day rally erased earlier losses and brought the S&P 500 close to record highs. Optimism grew as expectations for a rate cut gained traction amid concerns about the labor market, with investors now pricing in a 25-basis-point cut, which helped support sentiment across major markets. As December begins, seasonal patterns suggest a firm year-end finish, although all attention is now shifting to the upcoming FOMC meeting. The recently concluded 43-day government shutdown also disrupted the flow of economic data, leaving investors without several of their usual reference points during a critical period.

Global Market Overview

In the U.S., on top of the Fed officials’ more dovish tone, corporate earnings also helped lift sentiment, with about 83% of S&P 500 companies reporting third-quarter results above forecasts. However, the underlying economic picture remained mixed. The earlier government shutdown delayed several key data releases, and the updated figures pointed to softer momentum: September retail sales rose only 0.2% versus the expected 0.4%, and consumer confidence fell sharply in November, with the index dropping 6.8 points to 88.7, highlighting growing caution among households despite the market rebound.

Globally, European stocks advanced as inflation across major economies stayed close to the ECB’s target, supporting hopes of a stable price environment heading into year-end. Japanese equities benefited from stronger domestic data and rising expectations of policy adjustments by the Bank of Japan, while Chinese markets were lifted by renewed interest in tech and AI names despite weaker industrial profits.

Canadian Market Overview

Canadian equities outperformed in November, driven by solid commodity momentum and improving domestic economic data. The S&P/TSX Composite Index climbed 3.7% for the month, closing at a record high above 31,000 points. Inflation continued to ease, with headline CPI slowing to 2.2% year over year in October from 2.4% in September. The labor market also showed unexpected strength, with employment jumping by 66,600 in October and the unemployment rate edging down to 6.9%. GDP surprised firmly to the upside as well, expanding at a 2.6% annualized pace in Q3.

Canadian retail sales remained soft in September, slipping 0.7% as expected, with most categories declining and autos posting a notable 2.9% drop. While lower interest rates are offering some support, uncertainty around trade continues to pressure consumer activity. In the housing market, new home prices fell for a seventh consecutive month in October, leaving the year-over-year decline at 1.8%.

Canadian Sector Performance

• Materials: Gold and silver miners outperformed as precious metals surged, with silver hitting a record high and gold rising nearly 6%.
• Energy: Oil and gas producers benefited from firmer natural gas prices and stronger oil export activity.
• Technology: The TSX’s tech subgroup weakened after a major hardware manufacturer warned of softer demand, mirroring broader tech softness in U.S. markets.

Important Dates

• December 5: Canada Unemployment data
• December 10: U.S. CPI Inflation (October), Fed & BOC Interest Rate Decisions
• December 15: Canada CPI Inflation (November)
• December 18: U.S. CPI Inflation (November)
• December 19: Canadian Retail Sales

Portfolio Strategy Tip

November was a reminder of how quickly market leadership can shift. The tech names that dominated much of 2025 were on pause, while areas that had been quieter, such as precious-metal miners and healthcare, took the lead. These kinds of rotations highlight why a well-diversified portfolio matters, both across asset classes and within the equity market itself. After several months of strong gains, it’s a good moment for investors to revisit allocations, make any necessary adjustments, and stay focused on long-term plans rather than being pulled in by short-term noise.

Final Thoughts

As December begins, the market’s attention is focused on the Fed’s upcoming meeting. A rate cut would support the current momentum and could help fuel a year-end rally, while a more cautious stance or disappointing holiday spending could add bumps along the way. Beyond the near term, early signals for 2026 look constructive: many institutional investors see room for equities to climb further, with expectations for the S&P 500 to move into the 7,000–7,500 range and some forecasts even higher. At the same time, investors are keeping a close eye on potential risks, including stretched valuations in parts of the AI space and the possibility of renewed pressure from bond yields.