DFG Navigator Archives | November 2025

Your Capital Markets Snapshot: Markets Navigate Volatility Amid Fed Uncertainty

Global markets experienced heightened volatility last week, with equities posting further declines and continuing their worst run since the tariff-driven sell-offs in April. The technology sector, particularly AI-related stocks, faced renewed profit-taking and bubble concerns, despite strong earnings from NVIDIA. Ambiguity around the Federal Reserve’s next policy move added to market uncertainty, expectations around the Fed’s action at December’s meeting have been shifting wildly. U.S. Treasury yields slipped late in the week as expectations for a December rate cut rose sharply. The delayed September jobs report showed solid hiring but a rising unemployment rate, further muddying the economic outlook. Bitcoin suffered a steep sell-off, ending the week below $85k well off its October $12k high. Amid these swings, the importance of diversification becomes apparent.

Your Capital Markets Snapshot: Shutdown Ends, Markets Shift as AI Stocks Cool

On November 14th, the longest ever U.S. government shutdown ended after 43-days after a Congressional bill was passed to fund the government through January 30, 2026, restoring federal operations and backpay for workers. It is estimated the event reduced Q4 economic growth by 1.5 percentage points, but many expect economic growth will rebound in 2026. The technology sector (particularly AI companies), which recently led market gains, has underperformed to begin November as investors rotated into health care, energy, and materials sectors. The probability of a December Fed rate cut dropped sharply to below 50%. Bond yields rose across maturities as Fed officials continue to signal caution on rate cuts. Meanwhile, Bitcoin extended its decline. Market volatility increased, with the VIX remaining elevated and the S&P 500 bouncing off key technical support but not setting new highs. However, S&P 500 earnings outperformed expectations, supporting broader market resilience despite recent sector rotation and uncertainty over delayed economic data releases.

Your Capital Markets Snapshot: Fed Cuts Rates Amid Shutdown and Trade Talks

Markets ended October near record highs, shrugging off several potential headwinds including a more hawkish Federal Reserve, ongoing government shutdown, and high-stakes U.S.-China trade negotiations. The Fed cut rates by 25 basis points as expected but signaled further cuts, especially in December, are far from certain.  Markets had previously priced in the near certainty of a December rate cut, so the Fed’s news led to a sell-off in bonds and a rise in Treasury yields as expectations adjusted. The Trump-Xi meeting resulted in a partial easing of trade tensions, with both sides agreeing to roll back some tariffs and trade restrictions, which should provide relief to supply chains and corporate margins. Despite the government shutdown delaying key economic data, private sector indicators suggested underlying economic resilience. Corporate earnings were robust, with most S&P 500 companies beating expectations, especially in large-cap tech, which has helped propel major equity indexes to new highs. However, market breadth narrowed and volatility remains elevated, with small- and mid-cap stocks lagging their large cap peers. The AI-driven rally in tech continues, though some concerns about overvaluation are circulating. Overall, while volatility picked up, the market rally remained intact.  Caution is warranted heading into November with the government shutdown still looming and increased uncertainty on the future actions of the Fed.

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