TLDR:
U.S. equities extended their strong 2025 performance, supported by another quarter of earnings that surpassed expectations and a macro backdrop increasingly shaped by Fed easing and stabilizing inflation. International developed markets lagged, but emerging markets continued to benefit from a weaker dollar and improving growth prospects, a trend highlighted in recent Advisor Outlook data showing EM as one of the few regions gaining consensus support. Bonds resumed their historical role as a source of ballast, with correlations turning positive for diversification and fixed income delivering meaningful gains during equity pullbacks.
Market Overview
Equity markets continued to grind higher in November, with the U.S. once again leading global benchmarks. The S&P 500’s advance was powered by the technology, communication services, and healthcare sectors, reflecting the same earnings strength shown in Q3 earnings, which realized EPS far exceeded preseason expectations.
International markets were mixed: developed ex-U.S. equities posted modest gains but continued to lag due to softer earnings momentum, while emerging markets remained a bright spot as the dollar weakened and growth expectations held firm. The Student of the Market report reinforced this dynamic, noting that EM returns historically strengthen during periods of dollar softness and that EM remains the lowest-correlated region to the U.S. since 2015.
Small caps underperformed again, hurt by a strong dollar and continued rotation into large-cap growth, a trend consistent with Advisor Outlook findings showing that the average advisor remains heavily overweight small caps relative to broad benchmarks.
Federal Reserve & Policy
After delivering its second rate cut in October, the Federal Reserve signaled a more patient approach heading into year-end, noting the need to balance easing financial conditions with still-above-target inflation.
Market expectations for a December cut faded through November, emphasizing that historically, non-recessionary easing cycles have generated particularly strong returns for equities—especially growth and technology stocks.
Labor-market data became more uneven as the government shutdown delayed key releases, amplifying investor sensitivity to private surveys. Even so, the Student of the Market pointed out that Fed pauses followed by slow, data-dependent cuts have historically supported forward returns in both stocks and bonds, making this macro environment broadly constructive rather than destabilizing.
Economic Landscape
U.S. economic growth remains resilient, although the pace is flattening. After expanding at 2.7 percent in Q3, the economy entered Q4 with slightly softer momentum as consumer spending cooled modestly and shutdown-related disruptions surfaced in travel, public services, and hiring. Despite these pressures, corporate fundamentals stayed firm.
Q3 S&P 500 EPS growth came in well above preseason estimates, with more than 60 percent of year-to-date earnings strength coming from technology and communication services. Globally, emerging markets continue to show relatively healthy GDP expectations compared with the U.S. and Europe, supported by improving trade sentiment and a falling dollar.
Asset Class Snapshot
Equities benefited from another month of strong earnings, with mega-cap technology firms delivering outsize contributions to index-level performance.
The Student of the Market’s analysis of the current AI cycle reinforced that, unlike the dot-com era, price gains remain largely supported by earnings growth rather than speculative expansion.
Value stocks saw renewed interest as investors sought balance against concentrated growth exposure, though growth remained the primary driver of market gains.
Fixed income rallied meaningfully as long-term yields declined, building on the trend shown in the Advisor Outlook’s year-to-date bond index performance table, where core bonds, high yield, and municipals all generated mid- to high-single-digit returns.
Bond-stock correlations continued to normalize, with bonds once again posting positive returns during weeks of equity weakness.
Alternatives, particularly gold, private credit, and market-neutral strategies, remained sought after for diversification, with the Student of the Market’s quilt chart illustrating how alts have helped buffer performance across different rate cycles.
Market Themes To Watch
Corporate earnings momentum continues to be a central market driver. Realized Q3 earnings beat preseason expectations by a wide margin, and revisions for tech and communication services remain firmly positive. Meanwhile, fund flows into equities turned negative in 2025, which the Student of the Market notes has historically preceded stronger forward returns rather than signaling a top.
Emerging markets should continue to provide meaningful diversification benefits, as their correlation with U.S. equities has fallen to decade lows and growth prospects remain more favorable than in developed regions. Cash levels across investors remain elevated, with both reports noting large allocations to money markets; this represents latent demand that could support risk assets as macro uncertainty eases.
Fixed income offers compelling yields across the curve, while wider dispersion in credit may create opportunities in flexible bond strategies. Innovation themes rooted in AI, automation, semiconductor infrastructure, and advanced computing continue to anchor longer-term growth. Both reports emphasize that while volatility is likely to accompany these themes, the current AI cycle is supported by real cash flows and capital spending rather than speculative enthusiasm.
– Zenith Wealth Partners
Sources:
- CaixaBank Research — Financial Markets Daily Report (Nov. 17, 2025)
https://www.caixabankresearch.com/en - Morningstar — November 2025 Stock Market Outlook
https://www.morningstar.com - Nuveen — Weekly Fixed Income Commentary (11/17/2025)
https://www.nuveen.com - S&P Global — Week Ahead Economic Preview (Nov. 17, 2025)
https://www.spglobal.com - Carnegie Investment Advisory — Monthly Market Commentary: November 2025
- Magellan Financial — Stock Market Commentary: November 2025
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