A commercial aircraft flies over Washington, more than a month into the continuing U.S. government shutdown on Capitol Hill in Washington, D.C., U.S., November 6, 2025. REUTERS/Evelyn Hockstein
Index Performance
At the close of the LSEG Lipper fund flows week ending November 12, 2025, U.S. broad-based indices were mixed. The S&P 500 Total Return Index had a narrow gain of only 0.15%, followed by the Dow Jones resilient gain of 1.03%. The Russell 2000 Index was the biggest decliner at negative 2.03%. The Nasdaq decline (-1.86%) continued this week as AI-linked mega caps came under renewed pressure for a second consecutive week. Investor tone toward large-cap growth has shifted meaningfully, with profit-taking evident across several of the market’s most crowded names.
Broad-based fixed income indices experienced a softer tone this week, as all major indices ended the period with mixed results across the board. The FTSE High Yield Total Return Index declined by 0.39%, while the FTSE Municipal Tax-Exempt Investment Grade Bond Index had a marginal increase of 0.08%. The FTSE U.S. Broad Investment Grade Bond Total Return Index remained flat for the period.
Macro Viewpoint
The longest government shutdown in U.S. history has finally come to a close, ending at a record 40 days. The end of the shutdown has allowed the U.S. economy to reorient toward pragmatism, shifting the narrative from political uncertainty to economy clarity. Despite having the green light to reopen, the airline industry, one of the most directly affected sectors, remains compressed. According to the Federal Aviation Administration, the current 6% flight freeze will stay in place as the agency evaluates whether the system can safely ramp back to full capacity.
This pattern extends across other federal agencies. The Bureau of Labor Statistics has yet to resume normal data releases, leaving economists, investors, and institutions bracing for a potential flood of backlogged data. For much of the shutdown, the economy has effectively been flying on autopilot, with muted data flow limiting the market’s ability to gauge evolving macro conditions.
The key question now is how delayed data will influence the Federal Reserve’s “wait-and-see” approach. A sudden backfill of releases, particularly if they show a sharp downtrend in the unemployment rate or softer-than-expected CPI, could recalibrate expectations around policy timing. Markets remain on edge as they await clarity surrounding economic normalization.
On the Yield Front
From a yield standpoint, there was a marginal shift in yields. The two-year declined 4 basis points, the five-year fell 3 basis points, and the 10-year stumbled 2.5 basis points, while the 30-year also declined 2 basis points.
Fund Flows by Asset Type
Investors “ran for cover” and took a more defensive approach this week. U.S. money market funds recorded a massive $118 billion in net inflows, a sharp acceleration from the $23.2 billion in the prior week, as rising uncertainty surrounding the U.S. government shutdown pushed investors into safety assets. Meanwhile, U.S. equity funds attracted a strong $14.9 billion, up from the $9.9 billion in the previous week, marking a third consecutive week of positive flows. Within equities, U.S. large cap strategies led the charge, with majority of the favorable inflows coming from S&P 500 index funds. Despite a modest pullback in companies with high exposure to artificial intelligence, risk appetite within the large-cap universe remains resilient, for now.
Within fixed income, U.S. taxable bond funds extended their winning streak for a fourth consecutive week, adding $1.3 billion, a large decline from the prior week’s $6.7 billion. In comparison, U.S. municipal bond funds posted their fifth consecutive week of gains, with $1.2 billion in net inflows, reflecting strong demand for tax-exempt income. Commodity funds snapped a four-week streak, with an outflow of $286.1 million, a steep decline from the $5.3 billion inflow the previous week. U.S. mixed assets funds had an outflow of $215 million, and U.S. alternative funds had an outflow of $735 million.
