Treasury Yields Ease, Boosting Risk Assets
Markets posted a broad-based rally last week, helped by a meaningful drop in long-term interest rates and softer-than-expected employment data. The S&P 500 gained 5.9%, the NASDAQ rose 6.6%, and the Dow advanced 5.1%.
The 10-year Treasury yield fell to 4.57%, down from over 5% just one week earlier. This pullback in yields supported growth-oriented sectors and improved investor sentiment following a challenging October.
Labor Market Slows Modestly
October’s jobs report showed 150,000 new jobs added, below the expected 180,000. The unemployment rate ticked up to 3.9%, and average hourly earnings increased at a slower pace of 4.1% year-over-year. This combination of softening employment and wage growth appeared to ease concerns around inflationary pressure.
Markets interpreted this data as a signal that the Federal Reserve may maintain its current policy stance rather than resume tightening.
Sector Performance and Leadership Rotation
Consumer discretionary and small-cap stocks were among the top-performing segments last week, rebounding strongly from recent underperformance. Real estate and technology also posted solid gains, while energy was more mixed due to oil price volatility.
The shift in yield expectations reignited interest in sectors that had lagged in the higher-rate environment.
Alphastar CIO Tony Parish noted:
“We’ve seen markets respond quickly to shifting rate expectations, especially in growth-oriented sectors,” said Tony Parish, Alphastar CIO.”
Here are three investor considerations for the current environment:
-
Rate Expectations Are Driving Equity Flows
As the 10-year yield dropped below 4.6%, investor appetite for equities increased. Continued attention to Fed language and inflation readings remains key.
-
Labor Market Signals May Influence the Fed
The cooling pace of job growth and wage moderation could allow the Fed to maintain rates into early 2026 without further hikes, depending on broader inflation trends.
-
Rotation to Small-Cap and Consumer Sectors
The performance rebound in small caps and discretionary stocks may signal a more optimistic outlook for domestic demand and risk tolerance, though this could shift quickly.
Final Thoughts
November opened with a notable shift in tone as falling yields and slightly weaker labor data boosted equities across the board. With the 10-year yield pulling back and inflation pressures appearing to ease modestly, markets found room to rally — particularly in areas that had been under pressure.
As Tony Parish noted:
“The market may continue to react to even subtle changes in economic tone. Flexibility and thoughtful positioning remain essential.”
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Disclosure:
This blog post is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. All data is as of November 3, 2025. Please consult with a qualified financial professional for personalized advice.
Stocks Rally as Yields Retreat and Labor Market Cools: Week of November 3, 2025
Treasury Yields Ease, Boosting Risk Assets
Markets posted a broad-based rally last week, helped by a meaningful drop in long-term interest rates and softer-than-expected employment data. The S&P 500 gained 5.9%, the NASDAQ rose 6.6%, and the Dow advanced 5.1%.
The 10-year Treasury yield fell to 4.57%, down from over 5% just one week earlier. This pullback in yields supported growth-oriented sectors and improved investor sentiment following a challenging October.
Labor Market Slows Modestly
October’s jobs report showed 150,000 new jobs added, below the expected 180,000. The unemployment rate ticked up to 3.9%, and average hourly earnings increased at a slower pace of 4.1% year-over-year. This combination of softening employment and wage growth appeared to ease concerns around inflationary pressure.
Markets interpreted this data as a signal that the Federal Reserve may maintain its current policy stance rather than resume tightening.
Sector Performance and Leadership Rotation
Consumer discretionary and small-cap stocks were among the top-performing segments last week, rebounding strongly from recent underperformance. Real estate and technology also posted solid gains, while energy was more mixed due to oil price volatility.
The shift in yield expectations reignited interest in sectors that had lagged in the higher-rate environment.
Alphastar CIO Tony Parish noted:
Here are three investor considerations for the current environment:
Rate Expectations Are Driving Equity Flows
As the 10-year yield dropped below 4.6%, investor appetite for equities increased. Continued attention to Fed language and inflation readings remains key.
Labor Market Signals May Influence the Fed
The cooling pace of job growth and wage moderation could allow the Fed to maintain rates into early 2026 without further hikes, depending on broader inflation trends.
Rotation to Small-Cap and Consumer Sectors
The performance rebound in small caps and discretionary stocks may signal a more optimistic outlook for domestic demand and risk tolerance, though this could shift quickly.
Final Thoughts
November opened with a notable shift in tone as falling yields and slightly weaker labor data boosted equities across the board. With the 10-year yield pulling back and inflation pressures appearing to ease modestly, markets found room to rally — particularly in areas that had been under pressure.
As Tony Parish noted:
READ THE FULL REPORT
Disclosure:
This blog post is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. All data is as of November 3, 2025. Please consult with a qualified financial professional for personalized advice.