October Market Summary: HalloWIN

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Rather than a scared face, most investors would have had a smile during the late October Halloween period. Most stock and bond markets rose, with the US’ Standard & Poor’s 500 reaching near-record levels.

The rise was led yet again by US big Tech companies, some of which posted solid earnings and increased capital expenditures, which some analysts believe will continue to fuel earnings growth.

AI chip maker Nvidia became the first company ever to reach a $5 trillion market cap – more than twice the estimated 2025 Italian GDP. The Tech rise increased US market concentration as not all companies joined the rally: The S&P 500 Equal Weight Index shed 1.8%, while Global SmallCaps and Value stocks lost 1% and 1.1%, respectively.

Bond investors were happier, following a US rate cut, relatively benign global inflation, and also after a US-China summit that sealed a peaceful trade agreement, at least for the next 12 months: US Treasuries and leading European sovereign countries’ debt posted positive returns. UK gilts outperformed, given the higher taxes – read lower deficit – that Chancellor Reeves is expected to unveil in the forthcoming Budget. Japanese Equities soared following the appointment of Sanae Takaichi as prime minister, on expectations that she will have a pro-business & growth agenda.

Volatility: Staying the course pays off

Research shows that staying invested remains one of the most powerful strategies for long-term success. As seen in the chart below, markets can shift in a short span: what began as a turbulent year marked by geopolitical uncertainty and steep declines (e.g., S&P 500 down -15.0% YTD as of April) turned into a strong recovery by late October (the S&P was up by 17.9% by Oct. 27). This turnaround underscores the dangers of market timing: exiting during downturns, a pattern often repeated by scared retail investors, usually means missing the rebound.