October Monthly Market Review

An excerpt from our October Monthly Market Review:

Equity risk premiums and credit spreads remain compressed, and measures of expected market volatility are low. U.S. equities powered further ahead in October to close the month near yet another all-time high. Non-U.S. developed and emerging equity markets also rose in U.S. dollar terms, notwithstanding the dollar’s appreciation. They have outperformed the U.S. market so far this year. AI-related firms remain the dominant driver of the U.S. market, accounting for the bulk of the market’s gains as well as its increasing concentration. The Fed cut rates by 25 basis points as widely expected and ended its program of quantitative tightening. But Chair Powell sought to dampen expectations on the pace of further easing. The U.S. Treasury market remains unconcerned about inflation risks and the prospect of increasing Treasury issuance. Investment grade and high-yield bonds rose slightly in October, adding to earlier solid gains. Oil prices fell in October and are down nearly 15% so far this year. The dollar index rose in October but remains down 8% in 2025.

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