Source: FactSet
Global markets closed the month of October with mixed results. Stocks continued to rise in October 2025, as trade tensions eased and AI enthusiasm soared, while global bonds ended modestly lower due to sticky inflation and hefty global borrowing costs. The S&P 500 saw gains for the sixth month in a row. Easing trade tensions, strong corporate earnings, and continued AI enthusiasm helped the index gain 37% from its April 8 lows.
The S&P 500 gains in October were driven primarily by technology strength, as AI spending remained on fire. While this is a positive development, renewed optimism has pushed US equity markets back to near all-time highs, sparking concerns about a potential bubble. Amid AI enthusiasm, everything else has lagged, including dividend, value-oriented, and smaller-cap stocks. Against this backdrop, we continue to emphasise diversification beyond highly concentrated US markets.
Within international markets, Asian stocks had strong gains. Japanese stocks gained after the election of a new prime minister, which the market viewed as broadly positive. Separately, trade developments between the US and China were helpful for Korea and Taiwan, whose economies are heavily reliant on AI and electronics manufacturing.
Within bonds, the delayed consumer price index showed inflation came in cooler than expected, helping the Federal Reserve cut rates by 25 basis points to a range of 3.75-4.0%. However, Chairman Powell caught the market off guard by casting doubt on a December rate cut. The Fed’s move pushed bond yields lower, and thus US bond prices higher.
Lastly, gold extended its record-setting rally, but it also experienced its first significant setback in months as investors took profits.
Source: FactSet
The more you take, the more you leave behind. What am I?
LAST MONTH’S RIDDLE:
I speak without a mouth and hear without ears. I have no body, but I come alive with wind. What am I?
ANSWER: Echo.
With the year winding down, now’s a good time to check on your year-to-date tax situation. Reviewing your income, deductions, and retirement contributions early can help you avoid surprises come tax season and give you time to make adjustments if needed.
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