November 2026 Market Update - Global markets navigate an uncertain outlook
Corporate earnings, AI investment and economic growth remained in focus alongside inflation, interest rates and geopolitical uncertainty.
Technology shares face pressure.
Global equities experienced mixed performance in October as company earnings and continued investment in artificial intelligence helped offset geopolitical tensions and concerns over borrowing costs. The FTSE 100 reached a seven week high mid-month, while European stocks recorded their strongest monthly gains since June.
US stocks were more mixed as investors rotated away from some of the biggest technology companies. Bond yields also climbed amid concerns over interest rates and increased borrowing to fund AI investment. The US Federal Reserve (Fed) kept interest rates unchanged at 3.75% to 4% in October.
US inflation rose to 3.7% in September, up from 3.4% in August. The jobs market also cooled, with employers adding just 29,000 jobs, down from 133,000 the previous month. Unemployment edged up from 4.1% to 4.2%. US consumer confidence rebounded in October as households became more optimistic about the jobs market.
UK Budget and outlook.
Chancellor John Healey delivered his first Budget, announcing a £100 energy payment for up to 20 million households in England in council tax bands A to D. To help fund the measures, he temporarily raised the tax surcharge on banks to 6% for 15 months and increased tax rates on property and savings income by two percentage points from April 2027.
Britain’s economy grew by 0.1% in August, defying forecasts for a contraction, while annual growth reached 2.1%, its strongest since late 2022. Manufacturing expanded by 1.2%, while computer programming was the biggest contributor over the three months to August, suggesting AI investment is supporting growth. The UK was also the fastest-growing G7 economy in the first half of 2026.
UK inflation rose to 3.5% in September, from 3.1%, prompting a Bank of England rate rise in November to 4%. Meanwhile, unemployment fell to 4.7% in the three months to August, from 4.9%, while annual pay growth edged up to 3.7%.
Chinese trade remains buoyant.
China’s economy grew by 4.5% in the third quarter, up from 4.3% in the previous three months and ahead of expectations. Exports surged 36.3% year on year in September, driven by strong global demand for technology and pushing the monthly trade surplus to a record high. Beijing is increasing fiscal support to meet its growth target, although weak domestic spending and investment continue to weigh on the economy.
The European Central Bank (ECB) held its deposit rate at 2.5%, despite inflation reaching a three-year high of 3.8% in September. Eurozone business activity expanded at its fastest pace in nearly three-and-a half years, supported by stronger services activity. However, political and economic uncertainty in France weighed on private-sector growth.
Policymakers are expected to raise rates again in December, when updated forecasts will provide more clarity on inflation.
Market-moving events
AI concerns weigh on technology stocks. The Nasdaq 100 fell 6.9%, while Nvidia declined
almost 15%, as investors grew concerned that revenues from AI services may not justify the substantial capital expenditure being committed to the technology.
Equity performance diverges across regions. The S&P 500 fell just over 1%, while the FTSE 100 gained around 2% as energy stocks rallied. Latin American markets fell sharply towards the end of the month following Lula’s surprise victory in Brazil’s presidential election.
Higher inflation keeps pressure on interest rates. US bond markets recovered from an early sell-off, with the 10-year Treasury yield falling from 5.35% to around 5%. Nevertheless, inflation remained elevated, while a 12% rise in oil prices added to concerns that interest rates may need to remain higher for longer.
Investment highlights
Tactical positioning supports returns. Tactical asset allocation contributed strongly to
performance, with overweight positions in energy and healthcare adding value. Underweight positions in US, emerging market and Asia Pacific ex-Japan equities also contributed to relative returns as AI-related stocks sold off.
Reducing interest rate risk. During the month, we reduced exposure to longer-dated
government bonds in favour of short-dated bonds to limit interest rate sensitivity. This reflects a more defensive approach for the Agility portfolios. We also increased exposure to short-dated Japanese bonds to benefit from a potential rise in the yen.
Maintaining a defensive stance. The portfolios remain underweight equities, particularly in the US and Asia Pacific ex-Japan, reflecting continued caution about market concentration and AI related valuations.
This update reflects Omnis and our investment management firms’ views at the time of writing and is subject to change. The document is for informational purposes only and is not investment advice. We recommend you discuss any investment decisions with your financial adviser. Omnis is unable to provide investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given. Past performance should not be considered as a guide to future performance.
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