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On Friday, the Dow Jones Index (US30) rose by 1.01% (for the week, +1.93%). The S&P 500 Index (US500) gained 0.79% (for the week, +1.52%). The Technology Index Nasdaq (US100) closed higher by 1.04% (for the week, +1.47%). All three stock indices closed at new record highs on Monday, after soft US inflation data fueled expectations for Federal Reserve interest rate cuts later in the year and injected optimism into investor sentiment. The US Consumer Price Index (CPI) report for September (+0.3% m/m and +3.0% y/y) was slightly weaker than market expectations (+0.4% m/m and +3.1% y/y). Furthermore, the core CPI report for September (+0.2% m/m and +3.0% y/y) was also weaker than market expectations (+0.3% m/m and +3.1% y/y). A decline in inflation “without sacrificing growth” is perceived as the ideal scenario for a bull market.

On the corporate front, shares of AMD and IBM jumped by 7.5% and 8.8% respectively, following the announcement of the successful launch of IBM’s quantum error correction algorithm on AMD chips, a major step for the development of quantum computing that sparked a positive reaction across the sector. Intel rose by 1.6% after returning to profitability and publishing an optimistic prognosis. The banking sector also strengthened amid expectations that monetary policy easing would stimulate lending activity.

US President Donald Trump stated on Saturday that he is raising tariffs on goods from Canada by another 10%, over and above what they currently pay. The US Department of Commerce, the White House, and the Canadian Prime Minister’s Office have not yet commented on the situation. Experts note that this move could complicate bilateral trade relations, especially amidst existing disputes.

European equity markets were mostly up on Friday. Germany’s DAX (DE40) rose by 0.13% (for the week, +0.85%), France’s CAC 40 (FR40) closed down by 0.01% (for the week, +0.15%), Spain’s IBEX35 Index (ES35) gained 0.44% (for the week, +0.79%), and the UK’s FTSE 100 (UK100) closed 0.70% higher (for the week, +3.11%).

WTI crude oil prices reached their highest level in over two weeks on Monday, as an improved outlook for a US-China trade deal raised expectations for an increase in global energy demand. US Treasury Secretary Scott Bessent stated that negotiations with Chinese Vice Premier He Lifeng had led to “substantial progress,” which would be solidified at a meeting between Presidents Trump and Xi Jinping at the end of the week. Beijing confirmed that a preliminary consensus was reached on a number of key topics. Oil prices received additional support from supply concerns regarding Russia, following the sanctions imposed last week against Rosneft and Lukoil, which together account for about 50% of oil production in Russia and around 25% of its exports.

Asian markets traded with mixed dynamics last week. Japan’s Nikkei 225 (JP225) rose by 2.00%, China’s FTSE China A50 (CHA50) gained 3.23%, Hong Kong’s Hang Seng (HK50) was up by 1.07%, while Australia’s ASX 200 (AU200) showed a negative result of 0.07% for the past week. Asian stocks opened with solid gains on Monday. Negotiators from the US and China stated that they had reached a consensus on key issues, including export controls. Further support for the market came from data published on Monday showing that China’s industrial profits grew by 21.6% y/y in September, the fastest growth since November 2023, strengthening investor confidence in a sustained recovery of the industrial sector.

In Australia, investors focused on the anticipated Q3 inflation data and the monthly CPI for September, which could be pivotal for the Reserve Bank of Australia’s (RBA) next steps. Analysts estimate that the RBA is close to achieving its inflation and employment targets, but new data might reveal persistent price pressures. If the figures confirm sustained growth in consumer prices, it could lead the central bank to refrain from further policy easing at its meeting next week.

• S&P 500 (US500) 6,791.69 +53.25 (+0.79%)
• Dow Jones (US30) 47,207.12 +472.51 (+1.01%)
• DAX (DE40) 24,239.89 +32.10 (+0.13%)
• FTSE 100 (UK100) 9,645.62 +67.05 (+0.70%)
• USD Index 98.94 +0.27% (+0.27%)
   

News feed for: 2025.10.27

• Australia RBA Gov Bullock Speaks at 10:15 (GMT+2);
• German ifo Business Climate (m/m) at 11:00 (GMT+2);
• US Durable Goods Orders (m/m) (tentative).

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