Markets bask in a week of sunny news

Key takeaways

It was a week of upbeat news for global investors, from positive developments in trade talks to a better-than-expected inflation picture in the world’s largest economy (the US).

Investors have welcomed gentler inflation in the US
The US government remains in ‘shutdown’, reducing the volume and timeliness of US economic updates. However, a delayed snapshot of September’s inflation data was released last week, and was slightly lower than expected – 3%, versus 3.1%. Markets were heartened by this news, believing that lower pricing pressures would encourage the US central bank to cut interest rates at their next meeting, held later this week. As a reminder, markets welcome rate cuts (when supported by the economic picture) because lower rates make borrowing cheaper, encouraging businesses and consumers to spend more.

Signs of a US-China trade deal have boosted the mood too
The leading trade negotiators for the US and China have indicated that terms have been agreed on a range of prickly negotiating points, including export controls and shipping levies. This would set the scene for Presidents Trump and Xi to complete a deal, ending the latest bout of trade tensions which have so unnerved global markets. In a media interview, the US Treasury Secretary, Scott Bessent, claimed that Trump’s threat to impose 100% tariffs on goods from China was now “effectively off the table”. Global investors welcomed the news.

The world’s largest companies are reporting their earnings
Every three months, a ‘quarterly earnings season’ provides insight into the financial state of the world’s largest publicly listed companies. So far, the final earnings season of the year is off to a positive start, as businesses report their financial figures for the third quarter of 2025 (July-September). Updates have been delivered by more than a quarter of the companies included in the S&P 500 Index, which represents the share prices of the largest 500 US companies. The majority of those businesses have delivered better than expected results, providing more welcome news to investors’ ears. Later this week, investors will hear the results for Microsoft, Alphabet (Google), Meta (Facebook), Amazon and Apple, with updates on artificial intelligence (AI) a key area of focus for watchful analysts.

Market moves

• The prices of riskier asset types like shares rose last week, in keeping with an upbeat investor mood. Share prices in Asia performed especially well following signs of a US-China trade deal.

• In a stellar year for the price of gold, the traditional investor 'safe haven' took a rare step back last week, reflecting better investor confidence in the wider economic outlook.

What to look out for this week

• The eyes of market analysts around the world will be trained on the US central bank this week, as investors wait to hear confirmation of an anticipated interest rate cut.

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