US
U.S. equities ended the week mixed, signaling a pause in the market’s recent upward momentum. The Dow Jones Industrial Average advanced 0.32%, while the S&P 500 edged down 0.08% and the NASDAQ Composite gained 0.80%, supported by continued strength in large-cap technology names. In contrast, smaller companies faced renewed selling pressure, with the Russell 2000 falling 1.89%, reflecting investor caution toward domestically focused sectors more sensitive to economic slowdowns. The divergence between growth and value stocks remained evident, as the Russell 3000 Growth Index rose 0.62% compared with a 0.16% decline in the Russell 3000 Value Index, underscoring investors’ preference for companies with stronger earnings visibility. Despite the mixed performance, the broader market remains well positioned after substantial year-to-date gains, suggesting that investors are consolidating recent advances while weighing the outlook for interest rates, inflation, and overall economic growth.
Source: TradingEconomics, Bocconi Students Investment Club
U.S. Treasury yields moved slightly higher over the week, as investors reassessed the interest rate outlook amid ongoing uncertainty surrounding fiscal policy and economic growth. The 2-year yield rose to 3.58%, while the 5-year and 10-year yields climbed to 3.69% and 4.08%, respectively. The 30-year yield advanced to 4.66%, marking a modest steepening of the yield curve. The upward movement reflected renewed concerns over government spending and heavier Treasury issuance, which placed mild pressure on bond prices. Despite these gains, demand for longer maturities remained stable, suggesting investors continue to view U.S. debt as a safe haven amid a fragile macroeconomic backdrop.
Source: Yahoo Finance, Bocconi Students Investment Club
Although the ongoing U.S. government shutdown continued to delay the release of key economic data, the Federal Reserve proceeded with its scheduled October meeting on Wednesday, cutting interest rates by 25 basis points to a range of 3.75%-4.00%. The decision reflected growing concerns among policymakers that labor market conditions could deteriorate without further monetary support. Fed Chair Powell’s post-meeting comments emphasized the Committee’s focus on sustaining employment rather than combating inflation, which officials increasingly view as having moderated sufficiently. Following the announcement, markets raised their expectations for additional easing, with investors now pricing in approximately a 60-70% probability of another 25-basis-point rate cut at the December meeting, reinforcing the view that monetary policy will remain accommodative in the near term.
Europe and UK
European equities ended the week broadly lower, as renewed concerns over global trade tensions and slowing economic momentum weighed on investor sentiment. The STOXX Europe 600 declined 0.87%, marking a pause after several weeks of gains. Regional performance was mixed, with Germany’s DAX falling 1.54% and France’s CAC 40 losing 1.41%, both pressured by weaker manufacturing data and cautious corporate guidance. In contrast, Italy’s FTSE MIB outperformed, rising 1.62% as banking and energy stocks advanced on stronger domestic earnings and optimism surrounding fiscal stimulus discussions. The divergence across major indices reflected varying levels of economic resilience and differing exposures to global demand, with export-oriented markets such as Germany hit hardest by renewed trade frictions and uncertainty over China’s import outlook.
In the UK, the FTSE 100 gained 0.74%, supported by strength in defensive and energy-linked names after oil prices rebounded midweek. Investor sentiment was also buoyed by comments from Bank of England officials suggesting that further rate cuts could be considered should economic data weaken into the winter. However, underlying caution persisted, with investors closely monitoring upcoming inflation figures and the government’s fiscal plans ahead of the November budget. Despite short-term volatility, the index remains up 17.64% year-to-date, underscoring the UK market’s relative resilience amid ongoing global economic uncertainty.
Source: Yahoo Finance, Bocconi Students Investment Club
European government bond yields were little changed this week, reflecting a cautious tone across fixed-income markets as investors awaited fresh economic data and guidance from the European Central Bank. The German 10-year Bund yield edged up by 2 bps to 2.64%, while France’s OAT held steady at 3.42% and Spain’s 10-year yield was unchanged at 3.14%. In Italy, the 10-year BTP slipped by 2 bps to 3.38%, narrowing its spread against the Bund as sentiment improved following reports that the government intends to maintain fiscal discipline despite upcoming spending commitments. The UK 10-year gilt yield also remained stable at 4.40%, with investors balancing persistent inflation pressures against signs of softening growth. Overall, the limited movement across sovereign yields suggested markets are consolidating ahead of next week’s eurozone inflation release and further ECB commentary, with participants broadly expecting policy to remain on hold through the end of the year.
Source: Yahoo Finance, Bocconi Students Investment Club
Rest of the World
Asian equity markets posted mixed performances this week, with Japan once again leading regional gains. The Nikkei 225 surged 5.02%, reaching a new all-time high above 52,000 as strong corporate earnings, a weaker yen, and renewed foreign inflows fueled investor optimism. The rally was further supported by expectations that the Bank of Japan will maintain its accommodative stance amid subdued domestic inflation, reinforcing Japan’s appeal as a relative safe haven in the region. The strength of export-oriented sectors, particularly in technology and automotive industries, added to the positive momentum and underscored the resilience of Japan’s economic recovery.
In contrast, Chinese and Hong Kong equities faced renewed selling pressure as ongoing trade frictions with the U.S. and softer domestic demand dampened sentiment. The CSI 300 declined 1.25%, while the Shanghai Composite slipped 0.36% amid weaker industrial data and limited policy support signals. Hong Kong’s Hang Seng Index fell 1.03%, weighed down by losses in technology and property shares following disappointing earnings reports. Overall, regional investors adopted a cautious stance ahead of key U.S. inflation data and China’s upcoming credit and trade releases, as markets continue to balance optimism over Japan’s strength with persistent concerns about China’s slowing growth trajectory.
Source: Yahoo Finance, Bocconi Students Investment Club
In other regions, Latin American markets were mostly higher, supported by improved risk sentiment and fiscal optimism. Brazil’s Bovespa gained 2.30% after lawmakers approved a revised budget plan aimed at reducing the deficit, while Mexico’s IPC Index rose 2.66% on stronger manufacturing data. Turkey’s BIST-100 advanced 2.54%, extending its rally amid easing inflation pressures. In Asia-Pacific, South Korea’s Kospi climbed 2.69% on robust tech exports, while Australia’s S&P/ASX 200 declined 1.94%, dragged lower by weakness in commodity-linked shares.
Source: Yahoo Finance, Bocconi Students Investment Club
FX and Commodities
The U.S. dollar strengthened over the week, supported by renewed safe-haven demand and resilient economic data. The euro fell 0.76% to 1.15, as softer eurozone inflation figures reinforced expectations that the ECB will keep policy rates on hold. The British pound declined 1.28% to 1.31, pressured by weaker retail sales and ongoing fiscal uncertainty ahead of the November budget. The yen depreciated slightly, with USD/JPY rising 0.57% to 153.94, as markets scaled back expectations of near-term tightening by the Bank of Japan. Meanwhile, the Swiss franc weakened, with USD/CHF up 1.02% to 0.80, as investors favored the dollar amid persistent geopolitical tensions and a cautious global risk tone.
Source: Yahoo Finance, Bocconi Students Investment Club
Commodities traded mixed this week, as strength in precious metals contrasted with renewed weakness in the energy complex. Brent crude fell 0.83% to $64.66 and WTI declined 0.91% to $60.88, pressured by expectations of higher global supply and easing geopolitical risks. Natural gas surged 23.34% to $4.11, supported by colder weather forecasts and rising seasonal demand. Gold gained 2.64% to $3,995.70, extending its strong rally amid safe-haven flows and lower yields, while silver slipped 0.33% to $48.25. Copper edged up 0.12% to $5.09, helped by optimism over Chinese industrial activity. Overall, the divergence across commodity markets reflected investor caution as economic uncertainty and shifting policy expectations continued to shape trading sentiment.
Source: Yahoo Finance, Bocconi Students Investment Club
Next Week Main Events
Brain Teaser #36
A clock (numbered 1 – 12 clockwise) fell off the wall and broke into three pieces. You find that the sums of the numbers on each piece are equal. What are the numbers on each piece? (No strange-shaped piece is allowed.)
Solution: Using the summation equation, we arrive at 78. So the numbers on each piece must sum up to 26.
Brain Teaser #37
You are holding two glass balls in a 100-story building. If a ball is thrown out of the window, it will not break if the floor number is less than X, and it will always break if the floor number is equal to or greater than X. You would like to determine X. What is the strategy that will minimize the number of drops for the worst case scenario?
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