October 2025 Market Update

Overview

Global markets extended gains in October with a global benchmark for stocks ending the month up 5%, bringing year-on-year gains to 23.9%. A combination of strong tech earnings and large-scale AI investment - alongside an additional interest rate cut from the Federal Reserve (Fed) - buoyed sentiment.

The main questions being asked now include:

• How long can the AI boom continue?

• Is the interest rate cycle nearing a bottom?

Elsewhere, Japan’s stock market reached a new multi-decade high last month as the governing party voted in a new market-friendly Prime Minister, with the Yen also dropping on the back of the news. Japan and other Emerging Markets also benefited from easing trade tensions and lower energy prices, triggered by OPEC announcing a surprise increase in production.

In the UK, Chancellor Reeves came under growing pressure over the widening fiscal deficit and, though yields fell, the premium demanded over US and European issuers expanded. US bonds by comparison had a strong rally in the lead up the latest Fed cut although, with Governor Powell tilting cautiously on future cuts, this wasn’t maintained.

Full update below…