Multi-Asset Class Monthly Market Review - December 2025

U.S. Equity

Domestic equity markets, as represented by the S&P 500 Index (S&P) and the Russell 3000 Index, returned 0.25% and 0.27% respectively in November.¹

Eight of the 11 sectors saw positive returns for the month. The Healthcare sector was the best performing sector, returning 9.31% for the month, followed by Communication Services at 6.35%. The Information Technology sector was the worst performing sector, returning -4.29% in November.

Mid-caps (Russell Mid Cap Index) outperformed in November returning 1.27%, while small-caps (Russell 2000 Index) returned 0.96% and large caps (Russell 1000 Index) returned 0.24%. Value outperformed growth across all capitalizations during the month.

According to FactSet Earnings Insight as of November 21, 2025, the blended earnings growth rate in the third quarter, for the S&P 500, was 13.4%. Breaking out the “Magnificent Seven,” the reported earnings growth rate was 18.4%, while the other 493 companies also saw double-digit growth of 11.9%. The blended revenue growth rate was 8.4%, marking the highest revenue growth rate since Q3 2022. 

Non-U.S. Equity

Non-U.S. equity markets, represented by the MSCI ACWI ex-U.S. Index returned -0.03% in November. Developed markets, represented by the MSCI EAFE Index returned 0.62% as Europe (MSCI Europe) returned 1.47% and Japan (MSCI Japan) returned -0.69%. Emerging markets (EM) (EM), as represented by the MSCI Emerging Markets Index, returned -2.39% due largely to a -2.50%  return in Chinese equities (MSCI China Index) and a lackluster return of 0.87% in Indian equities (MSCI India).

Within the ACWI ex-U.S. Index, five of the 11 sectors posted positive returns. Healthcare was the best performing sector for the month, returning 5.22%, while the Materials sector was the second-best performer, returning 3.93%. Information Technology was the worst performing sector, posting a return of -5.80%.

Fixed Income

In November, Treasury yields fell slightly along the intermediate portion of the curve. The 2- and 5-year yields both fell approximately 9 basis points (bps). The yield on the 10-year fell 6 bps and the 30-year U.S. Treasury yield remained relatively flat with a 1 bp increase month-over-month.

The Bloomberg U.S. Aggregate Index returned 0.62% in November. Investment-grade (IG) credit returned 0.62%, AAA-rated bonds returned 0.68%, AA-rated bonds returned 0.63%, A-rated bonds returned 0.67% and BBB-rated bonds returned 0.56%. High-yield corporates, as represented by ICE BofA U.S. High Yield Index returned 0.58% during the month, while the Broad Treasury Index returned 0.61%. Spreads narrowed for high yield corporates while widening slightly for investment grade bonds.

Listed Real Assets

During November, real estate investment trusts (REITs), as represented by the MSCI U.S. The REIT Index and the FTSE NAREIT Index returned 2.21% and 2.43%, respectively. The Healthcare sector saw the strongest performance for the month while the Data Centers saw a reversal in returns and stood as the most challenged. Listed Infrastructure, represented by the MSCI World Core Infrastructure Index, returned 3.14% for the month.

Items to Watch

The government shutdown ended in November, allowing government statistics to once again be calculated and distributed, though not all information will be published, with the October jobs report and the Consumer Price Index (CPI) report being cancelled due to data collection issues.

The belated September jobs report saw unemployment edge up to 4.4%, the highest level since 2021. This coincided with an increased participation rate, pointing to more people entering the labor market that have not found jobs rather than workers facing job losses. The continued “low-hire, no fire” dynamic means the labor market remains relatively stable.

Consumer worry over the labor market, as well as general affordability (of goods and services) prompted the Consumer Sentiment Index to drop again in November, marking the second lowest level since June 2022. This consumer fatigue translated into a slower-than-expected gain in retail sales as consumers were more selective about purchases.

Manufacturing activity in the U.S. remains challenged, with the ISM U.S. Manufacturing PMI falling to 48.2 in November, the lowest reading in four months. The manufacturing sector contracted for the ninth consecutive month with a pullback in deliveries, new orders and hiring.

Sources

Bloomberg

FactSet

¹ All returns are expressed as total returns (price returns net of dividends).