Written by Dominic Williams
Global equity markets moved higher last week, with the MSCI All Country World Index rising by +1.2%, supported by growing expectations that the US Federal Reserve could continue cutting interest rates after its first move of 2025 last month. Technology stocks also provided a lift, as optimism around artificial intelligence continued to drive investor sentiment.
In the UK, the economic picture remained mixed. Consumer borrowing grew at its fastest pace in almost a year, suggesting households are still willing to spend, even as credit card borrowing eased slightly compared to the previous month. Political attention centred on the Labour Party conference, where Chancellor Rachel Reeves reaffirmed her commitment to fiscal discipline and maintaining market confidence. Despite the debate around government borrowing, UK equities performed well, with the FTSE All Share posting solid gains, up +2.3% over the week, with the more domestically focused FTSE 250 gaining +2.5%. We continue to see opportunities in the UK market, which remains attractively valued compared to many international peers.
Japan had a steadier week, with markets holding near record highs, the MSCI Japan gained +0.4%. Growth-focused companies outperformed, particularly in the technology sector, as enthusiasm for AI-related businesses spilled over from global markets, following OpenAI’s $6.6 billion share sale, which valued the firm at $500 billion. The recent leadership election brought a historic moment, with Sanae Takaichi becoming Japan’s first female prime minister. While this is a significant political milestone, we believe the long-term drivers of Japan’s market, such as corporate governance reforms and improving capital efficiency, remain the key reasons for our positive outlook.
In the US, markets showed resilience despite the start of a government shutdown, which delayed the release of official employment data. Investors instead focused on private sector reports that pointed to a softer labour market, reinforcing expectations for interest rate cuts in the months ahead. The S&P 500 ended the week higher, gaining +0.6%, reflecting confidence that monetary policy will become more supportive.
Overall, the week highlighted a balance between optimism about easier monetary policy and caution over political and fiscal risks. In this environment, maintaining a diversified and disciplined investment approach remains the most effective way to navigate uncertainty.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 6th October 2025.
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