Market Data as of Week Ending: 11/7/2025 unless noted otherwise
Equity markets declined sharply over the week as concerns about elevated valuations and heavy AI-related spending pressured stocks. Broader sentiment was
further dampened by the U.S. federal government shutdown, which became the longest on record. The ongoing lack of official economic data and worries about
the shutdown’s potential drag on GDP growth also weighed on investors. With limited government employment figures available, investors focused on a private
report from Challenger, Gray & Christmas released Thursday, which showed that employers have cut nearly 1.1 million jobs this year through October – marking
a 65% increase from the same period last year and a 44% rise over all of 2024. Fears of a potential AI bubble hit growth-oriented stocks particularly hard, leading
the Russell 1000 Growth Index to underperform its value counterpart by the widest margin since February. There was better breadth behind the surface as
energy, utilities, materials, staples and real estate outperformed late week as investors sought defensives and yield. Foreign equities were negative, driven by a
drop in retail sales and mixed earnings reports.
Bond yields were mixed over the week as investors balanced signs of a weakening labor market against the possibility that portions of the Trump
Administration’s tariffs could be overturned. The 2-Year U.S. Treasury yield fell to 3.56%, while the 10-Year yield edged higher to end the week at 4.10%.
Duration was a headwind across the board while quality outperformed. Investment-grade corporate bonds rose to 4.85% and high-yield bonds to 7.25% as highyield
bond yields increased on equity market weakness and broader risk-off sentiment.
There were a handful of economic numbers released over the week despite the ongoing government shutdown. The October ISM Manufacturing Index slipped
to 48.7% from 49.1%, marking the eighth month in a row of contraction as high and constantly shifting tariffs have raised costs, depressed sales and pressured
companies to lay off employees. The ADP jobs data came in better-than-expected, reporting that the private sector added 42,000 jobs during the month, the first
hiring increase in three months. The ISM Services Index rose to 51.4 in October, growing at the fastest pace in eight months. The University of Michigan’s
preliminary November reading of its Consumer Sentiment Index fell 3.3 points from the prior month to 50.3, its lowest level since the record low of June 2022.
According to the report, the decline was driven by a 17% drop in assessments of current personal finances and an 11% decline in expectations for business
conditions over the next year.