Trade Truce - November 2025 Snapshot

Snapshot

Global equities extended their rally in October, supported by improved trade sentiment, further monetary easing, and robust corporate earnings. While the US continued to lead global markets higher, Europe outperformed expectations amid stabilising inflation and progress on fiscal policy reform. Australian shares edged higher but finished off their highs as a hotter inflation print tempered near-term rate cut expectations. Commodities were mixed, with gold extending its record-setting run, while oil fell for a third consecutive month.

In the US, major indices advanced for another month, with the S&P 500 up 2.34%, the Nasdaq rising 4.72%, the Dow gaining 2.59%, and the Russell 2000 adding 1.81%. Market strength remained concentrated in larger-cap technology names, while equal-weight indices lagged. Sentiment was buoyed by a de-escalation in US-China trade tensions following the Trump-Xi meeting, which delivered a one-year truce and a 10% reduction in certain tariffs. The Federal Reserve cut rates by 0.25% at its October meeting and announced an end to quantitative tightening from December, though Chair Powell maintained a cautious tone, noting that a further cut in December was “far from a foregone conclusion". Broader market gains were tempered by the ongoing government shutdown and signs a of cooling labour market.

Across Europe, equities posted robust gains, with the STOXX 600 up 2.58%, the FTSE 100 gaining 4.09%, France’s CAC up 3.01% and Germany’s DAX modestly higher at 0.32%. Several major indices reached record highs, buoyed by easing trade frictions, benign inflation data, and an improving economic outlook. The European Central Bank held policy steady for a third consecutive meeting, while inflation across the Eurozone remained near target and surveys relating to economic activity improved. In the UK, inflation held at 3.8%, raising expectations of a December Bank of England rate cut. Political uncertainty persisted in France after Prime Minister Lecornu briefly resigned before being reappointed following budget concessions, which led to a sovereign credit downgrade. Meanwhile, UK fiscal speculation intensified ahead of November’s budget, with the Chancellor expected to prioritise debt reduction through spending restraint and possible tax changes.

In Australia, the ASX 200 edged up 0.39%, having reached a record high mid-month before retreating. Gains in Materials and Energy offset declines in Information Technology and Consumer Discretionary. The monthly CPI rose 1.3% quarter-on-quarter (3.2% year-on-year), above expectations, reigniting concern that inflation may prove stickier than the Reserve Bank’s forecasts. As a result, expectations for near-term rate cuts were pushed back to mid-2026. The labour market softened modestly, with the unemployment rate rising to 4.5%, while the Australian Dollar slipped 1.2% to US$0.6547.

Overall, October saw investor optimism persist despite policy uncertainty and uneven economic signals. Global equity indices remained near record highs, buoyed by easing trade tensions and ongoing monetary support. Looking ahead, providing the US government reopens, we will be focused on data released during November and December, as well as central bank meetings, which will provide further clarity on the trajectory of inflation, interest rates, and global growth heading into year-end.

Key Stocks