George Square Financial Management Market Commentary November 2026
Markets have had an eventful time, with the US midterm elections reshaping expectations for government policy. Democrats won majorities in both houses of Congress, setting the stage for divided government under President Trump. US shares initially rallied and government bonds gained, but technology stocks subsequently fell sharply amid concerns about potential constraints on AI infrastructure investment.
Energy prices remained central to the outlook. Oil fell sharply following the election results as investors anticipated a possible de-escalation in the Middle East, before recovering some ground. A sustained fall in energy costs could help ease inflation pressures. The contrasting performance of technology, renewable energy and oil companies highlighted how differently sectors could respond to the changing political landscape.
Despite the extreme market volatility, we believe portfolios remain well positioned. We continue to monitor developments closely, focusing on the data rather than short-term noise, and will adjust positions as needed. In our view, the sell-off reflects a reassessment of AI spending expectations and the policy outlook, rather than clear evidence of a fundamental deterioration in the broader economy.
In the UK, the Bank of England raised interest rates, warning that sustained high energy costs could feed through more widely into prices and wages. Stronger-than-expected economic activity also supported the decision. Further increases remain possible, although policymakers stressed that decisions would depend on the evidence. For households and businesses, higher borrowing costs add to continued pressure from living costs.
As always, please do reach out with any questions.