Global equities were poised to wipe out November losses on Thursday as growing expectations for Federal Reserve interest-rate cuts lifted markets after a selloff driven by concerns over rich AI-related valuations. The MSCI All Country World Index rose for a fifth consecutive session on November 26, 2025, narrowing its month-to-date decline to about 0.5% after seven straight months of gains. Asian equities gained 0.5% on the same day, reducing their November shortfall to roughly 2%. Futures pointed to a subdued open in Europe while US markets were shut for Thanksgiving.
Key Takeaways
- The MSCI All Country World Index climbed for a fifth straight trading day on November 26, trimming November losses to approximately 0.5% after a seven-month winning streak.
- Asian stock markets rose 0.5% on Thursday, bringing November losses to near 2% for the region.
- Investor flows shifted as rate-cut expectations from the Federal Reserve offset earlier selling tied to high AI valuations.
- European futures signaled a cautious start to trading, reflecting mixed regional sentiment ahead of US market reopenings.
- The US market was closed on November 27, 2025, for Thanksgiving, muting immediate US price discovery and volume.
- Market momentum in late November was fragile, concentrated in a handful of large-cap technology names linked to AI themes.
Background
Global equities entered November after an extended stretch of gains, with the MSCI All Country World Index logging seven consecutive monthly increases prior to the late-month pullback. That run reflected broad risk appetite across regions as economic data remained mixed but generally supportive of corporate earnings. In late November, worries about lofty valuations in AI-focused technology stocks triggered a selloff that dented market performance and heightened volatility.
Concurrently, investors began re-evaluating near-term US monetary policy. After a period of resilient inflation readings and higher-for-longer rate expectations, comments from economists and traders increasingly priced the chance of Federal Reserve easing in 2026. Those shifting odds have been an important driver of flows back into risk assets as bond yields moderated.
Main Event
On November 26, 2025, the MSCI All Country World Index extended gains for a fifth session, narrowing its November decline to around 0.5%. The rebound followed several days of heavy selling earlier in the month, which had been attributed mainly to profit-taking in AI and other growth-oriented sectors. Trading volumes were uneven, with notable concentration in large-cap US technology names that had previously led the rally.
Asian markets contributed to the recovery, advancing roughly 0.5% on Thursday and cutting their November losses to near 2%. Regional performance varied, with export-sensitive markets reacting to a combination of China macro signals and global demand expectations. Meanwhile, European futures suggested a tentative start to Friday trade, reflecting investor caution heading into a holiday period for US markets.
Market participants pointed to shifting expectations about Federal Reserve policy as a proximate cause for the late-November rebound. As traders increased the probability of rate cuts in 2026, yields on short-term US Treasuries eased, reducing the opportunity cost of holding equities and encouraging repositioning into risk assets. That dynamic helped offset earlier selling tied to valuation concerns.
Analysis & Implications
The market reaction highlights how quickly sentiment can pivot when policy expectations change. When the odds of monetary easing rise, equity valuations, particularly for longer-duration growth stocks, tend to re-rate higher as discount rates fall. For portfolios heavily exposed to AI winners, this can mean a rapid reversal from steep declines to quick gains as yields move.
However, the recovery in late November appears vulnerable. The rally rests in part on market-implied probabilities of Fed rate cuts that are sensitive to incoming inflation and payroll data. If underlying inflation remains sticky or economic indicators surprise to the upside, traders could rapidly unwind rate-cut bets, putting renewed pressure on equities that depend on low-rate assumptions.
Regionally, the narrowing of November losses does not imply uniform strength. Asian markets remain down roughly 2% for the month, indicating uneven recovery and potential divergence in corporate earnings momentum. European markets, signaled by subdued futures, may lag if investors remain cautious about growth and policy divergence between the US and Europe.
Comparison & Data
| Index/Region | Nov 26 status |
|---|---|
| MSCI All Country World Index | Up into fifth day; November loss ~0.5% |
| Asian equities | Up 0.5% on Nov 26; November loss ~2% |
The table isolates the most reliable, reported figures: the ACWI’s narrowing to a 0.5% November drop and Asian markets’ 2% month-to-date weakness. These headline numbers obscure intra-month volatility and sectoral concentration, notably the outsized influence of a handful of mega-cap growth stocks tied to artificial intelligence themes.
Reactions & Quotes
Market participants and commentators framed the late-November rebound largely as a reaction to shifting policy probabilities, with several official and media voices noting the interplay between rate expectations and equity flows.
Expectations of Fed easing have helped restore investor risk appetite, supporting a quick market rebound.
Bloomberg (media analysis)
The Bloomberg summary emphasized how pricing in rate cuts can change portfolio allocations quickly. That narrative was echoed across trading floors as volatility subsided and buyers returned to recently sold names.
Monetary policy decisions will continue to hinge on incoming inflation and labor-market data, keeping the outlook conditional.
Federal Reserve (official commentary)
Federal Reserve guidance, reiterated in public communications this year, remains data dependent, a caveat that market strategists say leaves room for both upside and downside surprises to policy expectations.
Unconfirmed
- No official Fed commitment to specific cut dates was announced; timing of any easing in 2026 remains market-forecasted rather than confirmed.
- The extent to which AI-valuation concerns have been fully addressed by the late-November rally is unclear and may be subject to further profit-taking.
Bottom Line
By November 26, 2025, markets had largely regained ground lost earlier in the month as rate-cut expectations softened the selloff driven by AI valuation worries. The MSCI All Country World Index’s recovery to cut its November loss to about 0.5% signals a tentative stabilization but not an unequivocal turnaround.
Investors should treat the late-November gains as conditional on future data and Fed communications. With the US closed for Thanksgiving and futures pointing to a cautious European open, the near-term path for equities will depend on incoming economic indicators and whether rate-cut probabilities persist.
Sources
- Bloomberg (media report)
- Federal Reserve (official central bank communications)
- MSCI (index provider)