Market rotation leaves US equities mixed

oncerns over the cost of AI investment weighed on sentiment, although third-quarter earnings have so far been strong.

Purchasing Managers surveys showed the US economy still expanding strongly, flash composite PMI slipped from 58.4 in September to 57.6 in October but remained firmly in strong growth territory, and manufacturing came in at 55.9, ahead of expectations.

The concern is inflation, with firms raising selling prices at the sharpest pace in more than four years, pointing to consumer inflation rising further above the Fed's target.

European shares posted their steepest weekly loss since early September, as political uncertainty in France and the Middle East war outweighed largely strong earnings. Eurozone private-sector growth slowed in October, with the composite PMI falling 1.2 points to 51.9, a four-month low, and hiring nearly stalled.

In the UK, inflation rose to 3.5% in September, above forecasts of 3.4% and up from 3.1% in August, its highest reading since October 2025. Oil remained a pressure point, with Brent trading around $116 a barrel.

Japanese equities fell as the global AI sell-off spread to Tokyo, sending investors into government bonds. Core inflation rose to 2.1% in September, while the measure excluding food and energy reached 2.4%, putting core inflation back above the BoJ’s target for the first time in 9 months. The Fed, ECB and Bank of Japan all announce rate decisions this week.

Equities

Global stocks finished down -0.2% in euro terms and down -0.7% in local terms last week. Year-to-date global markets are up by 16.5% in euro terms and up by 11.2% in local terms. The US market, the largest in the world, finished at 0.0% in euro terms and down -0.4% in local terms.

Fixed Income & FX

The US 10-year yield finished at 5.0% last week. The German equivalent finished at 3.3%. The Irish 10-year bond yield finished at 3.5%. The Euro/US Dollar exchange rate finished at 1.12, whilst Euro/GBP finished at 0.84.

Commodities

Oil finished the week at $103 per barrel and is up 88.6% year-to date in euro terms. Gold finished the week at $3,996 per troy ounce and down -3.0% year-to-date in euro terms. Copper finished the week at $14,472 per tonne and is up 21.9% year-to-date in euro terms.

The week ahead

Tuesday 28^th October

Federal Reserve interest rate decision.

Wednesday 29^th October

ECB interest rate decision.

Thursday 30^th October

Eurozone GDP and unemployment data is released.