US equities ended the week on a firmer note, supported by easing inflation indicators and steady economic data. While trading volumes were moderate ahead of the Thanksgiving period, sentiment remained constructive as investors gained confidence that the Federal Reserve is edging closer to a policy pivot in 2026.

Equities Advance on Softer Inflation Signals

Major US indices posted modest gains during the week, helped by follow-through buying in large-cap technology and communication services. Mid-week releases showed continued progress in disinflation, particularly within goods categories, which reinforced expectations that the Fed’s tightening cycle has effectively peaked. Rate-sensitive sectors such as consumer discretionary and real estate responded positively to the decline in Treasury yields.

Bond Yields Ease as Markets Price in 2026 Rate Cuts

Treasury yields moved lower across the curve, reflecting increased conviction that policy rates are likely to remain unchanged for the remainder of 2025 before easing begins next year. The 10-year yield retraced earlier gains as markets digested softer inflation data and a calmer energy backdrop. Credit markets remained stable, with investment-grade spreads holding firm amid steady demand.

Corporate Newsflow Supports Sentiment

Corporate announcements during the week were broadly constructive. Several technology and consumer companies provided upbeat outlooks for the holiday season, citing resilient demand and improved supply-chain conditions. Industrials also saw renewed interest following indications of improving order flows heading into year-end. While earnings season has largely concluded, revisions have remained generally stable, providing an additional anchor for equity markets.

Technology continued to lead performance, but the week also saw incremental rotation into financials and industrials. Financials benefited from the flattening of yields and expectations of improved credit conditions in 2026, while industrials were supported by signs of recovery in manufacturing activity. Defensive sectors such as healthcare held steady as investors maintained balanced positioning amid lingering macro uncertainties.

Sector Performance Shows Continued Broadening

Economic data released during the week painted a picture of controlled cooling. Retail sales were slightly softer but still resilient, and labour market indicators continued to normalise without signalling deterioration. Fed speakers maintained a consistent message: while inflation progress is encouraging, rate cuts will remain contingent on a sustained return toward the 2% target. Markets interpreted this as a positive signal that policy easing remains on track for next year, barring any material inflation surprises.

Key Takeaway

For the week of 17–21 November 2025, US markets remained supported by softer inflation data, easing bond yields, and constructive corporate signals. With policy expectations stabilising and earnings holding firm, sentiment stayed positive, although investors continued to balance optimism with attention to valuation and macro risks.