Market Review – September 2025

Emerging markets and Asia led stockmarket returns in September. In the US, equities (company shares) continued their rally, with the S&P 500 Index reaching new highs, supported by robust corporate earnings and the prospect of further rate cuts in 2025. In Japan, equities surged, driven by expectations of new government spending to support the economy following Prime Minister Ishiba’s resignation. In the UK and Europe, returns were more muted overall, but were nevertheless positive.

Bond market returns were broadly positive in the month as well. US government bonds (known as Treasuries) rallied as weak employment data and dovish Fed commentary increased expectations of further rate cuts in 2025. While UK government bonds (known as Gilts) saw volatility, they ended the month in positive territory. Corporate bonds and emerging market bonds also delivered gains. Whilst the Fed cut interest rates, other major central banks, including the European Central Bank, Bank of England and Bank of Japan left rates unchanged.

Major currency exchange rates were relatively unchanged over the month, with the US dollar weakening slightly against the euro, but strengthening a little against the UK pound and Japanese yen.

In commodity markets, the gold price continued to surge reaching new highs, driven by its safe-haven status and concerns over inflationary pressures. Copper prices jumped on supply disruptions, caused by a fatal mudslide at a major copper mine in Indonesia, while oil prices slipped amid oversupply fears.