Despite continuing concerns over an increasingly frothy US technology sector, the Dow Jones Industrial Average Index (DJIA) breached 48,000 points during November for the first time. Nevertheless, growing questions over elevated valuations within the sector – particularly amongst AI-related stocks – triggered some sharp dips during the month.
- A US rate cut is widely expected in December
- The European Commission cut its growth forecasts for the region
- Japan announced a fiscal stimulus package worth over 21 trillion yen
Tech angst: despite continuing concerns over an increasingly frothy US technology sector, the Dow Jones Industrial Average Index (DJIA) breached 48,000 points during November for the first time. Nevertheless, growing questions over elevated valuations within the sector – particularly amongst AI-related stocks – triggered some sharp dips during the month, and the DJIA eventually ended November only 0.3% higher than it began. Jitters over the possibility of an AI bubble were not allayed by news of record revenues at Nvidia and, in a BBC interview, Sundar Pichai, CEO of Google’s parent company Alphabet, acknowledged that there were “elements of irrationality” in the ongoing tech boom.
“The 43-day US government shutdown – the longest in history – ended in November”
Shutdown ends: the 43-day US government shutdown – the longest in history – ended in November thanks to a short-term funding bill that will expire at the end of January 2026. The shutdown meant that some economic data releases were missed; in particular, there was no consumer price inflation data for October. Elsewhere, employment data for September – released in November – proved to be mixed: 119,000 jobs were created in September compared with 4,000 lost in August; however, the rate of unemployment crept up from 4.3% to 4.4%, fuelling expectations of an interest rate cut in December. US consumer sentiment , as measured by the University of Michigan’s survey, deteriorated in November, falling to its lowest level since June 2022, while the Conference Board’s index of consumer confidence fell to its lowest level since April.
Downgraded outlook for Europe: the European Commission lowered its 2026 economic growth forecast for the eurozone from 1.4% to 1.2%, citing geopolitical tensions and trade-related uncertainties. Although the European Commission raised its 2026 forecast for Germany’s growth from 1.1% to 1.2%, it downgraded its prediction for France from 1.3% to 0.9%, citing economic and policy uncertainty. In a speech, President of the European Central Bank Christine Lagarde warned that Europe’s current growth model, based on export-led growth, is “geared towards a world that is gradually disappearing” and called on policymakers to focus on developing the region’s domestic economy. The Dax Index fell by 0.5% over the month.
Sanaenomics: Japan’s Cabinet approved a 21.3 trillion yen fiscal stimulus package to help boost the country’s economic growth and address the impact of persistent inflationary pressures. Over November as a whole, the Nikkei 225 Index fell by 4.1%.
To view the series of market updates through November, click here
