Market Report October 2025
Equity Markets
U.S. stocks again notched a record month: the S&P500 rose 2.5% in October, reaching an all-time high of 6,920. U.S. equities extended their powerful rally, marking the longest uninterrupted winning streak in four years. The S&P500 closed out its sixth consecutive month of gains and set its 36th record high of 2025. The Nasdaq Composite rose 4.8 per cent for its seventh straight monthly advance – its best run since 2018 – driven by renewed enthusiasm for artificial intelligence from an upbeat earnings season for major technology companies. Sentiment markedly improved as Donald Trump signalled a softer stance on trade with China and the Federal Reserve delivered its second rate cut of the year, reinforcing expectations of a gentler policy path. Robust M&A activity and aggressive capital spending by firms such as Alphabet, Amazon, Meta and Google outweighed concerns of a potential AI bubble and slowing labour market.
The UK equity market climbed 366 points, rising by close to 4% in October, maintaining pace with the US equity market, as the FTSE100 reached a record high of 9,787 points. Gains in the index were supported by easing global rate expectations and strength from heavyweight energy and financial stocks. Anticipated further Bank of England easing before year-end and a weaker pound lent support to internationally focused constituents of the index, amplifying foreign earnings returns. Corporate updates from the banking and consumer sectors suggested that profit growth was holding up despite slower domestic demand, and the UK government announced that investment in British AI companies reached a record £2.9 billion in early September.
Commodities
Gold broke through successive records in October, with spot prices reaching an all-time high of $4,381.98/oz on October 20th before a retrenchment to the $4,000/oz mark where it has remained pinned. Analysts had cited a frothy market in need of a correction following its blockbuster 60-day rally. Rate-cut bets, central-bank buying, and safe haven demand all contributed to rising prices, however debates over the root cause of demand remain ongoing. Whilst lower interest rates reduce the opportunity cost of holding assets such as gold (which pay no interest or dividends), they also weaken the dollar. The IMF does not publish detailed breakdowns of how much USD each country holds, however public estimates of China’s reserves are >$3.3 trillion (August 2025) suggesting significant recourse for continued buying of gold as a hedge.
Crude remained rangebound. Brent spent most of the month in the mid-$60s/bbl and briefly slid to ~ $61.50, with weakness tied to rising inventories and agency forecasts calling for a sizeable surplus into 2026. Prices bounced back to $65/bbl following US sanctions on Russian oil, Bloomberg data showed four-week average shipments slipped to 3.58m /bpd by November 2nd, down almost 200,000 barrels per day from late October – the steepest fall since January. Moscow’s oil revenues have dropped to their lowest level since August, with refiners in China, India and Turkey pausing purchases of sanctioned barrels from Rosneft and Lukoil ahead of a November 21st compliance deadline.
OPEC data points were mixed: the cartels October survey showed output up by about 30,000 b/d to ~28.43 mb/d, while the latest guidance outlined only modest additional hikes of roughly 137,000 b/d into November, a notably slower pace than earlier summer increases.
Monetary Policy
The Federal Reserve delivered its second cut of the year on October 29th, lowering the funds rate to 3.75% – 4.00% and signalling it would end balance-sheet runoff on December 1st, while acknowledging softer job gains and a still-elevated inflation backdrop; two officials dissented on the size and need for the move. The move framed the month’s risk tone in the U.S. and helped extend the equity rally.
The Bank of England did not hold an interest rate decision in October, however a lower-than-expected CPI reading of 3.8% vs. 4% forecast boosted odds of a 25bps cut at the next meeting on November 6th to 30%.
The European Central Bank held all three key rates unchanged (deposit 2.00%, refinancing 2.15%, marginal lending 2.40%) re-iterating once again its dependency on a data driven approach.
Inflation Trends (September)
Gold prices remained stable throughout May, trading between $3,200 and $3,440 per ounce, after peaking at an all-time high of $3,501.27 per ounce on April 22nd, its 28th record high of the year.
Brent crude prices averaged down to $64.45 per barrel in May 2025, down from $68.13 in April. Despite a brief spike following geopolitical tensions in Russia, crude prices have come under renewed pressure as OPEC+ confirmed a third consecutive 411,000 barrels per day production increase from July.
When the group announced its plan to unwind the voluntary cuts earlier this year, the agreement hinged on boosting the group’s combined production by 137,000 barrels per day each month between April 2025 and September 2026. At the current rate, OPEC+ is set to have restored all of the 2.2 million barrels per day in curbed output by September 2025, a year ahead of schedule.
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