Global equities weakened in October as a sharp selloff in AI and technology stocks overshadowed gains in other areas. Government bonds generally proved resilient, although French debt came under pressure amid political and fiscal concerns.
- The Nasdaq Index fell by 5.3%
- Inflationary pressures intensified in Europe and the US
- The IMF forecast global growth of 3.1% in 2026
Tech selloff: global equities weakened in October as a sharp selloff in AI and technology stocks overshadowed gains in other areas. Government bonds generally proved resilient, although French debt came under pressure amid political and fiscal concerns. Continuing Middle East tensions pushed energy prices higher. The International Monetary Fund (IMF) expects the global economy to expand by 3.1% this year, compared with growth in 2025 of 3.5%. The IMF warned: “The economy has been resilient, but that resilience is reaching its limits.”
“‘The economy has been resilient, but that resilience is reaching its limits’” (IMF)
Nasdaq falls heavily: share prices in the technology sector fell sharply as growing doubts over valuations were compounded by disappointing earnings announcements from bellwether stocks including Amazon , Alphabet and Intel . While the Dow Jones Industrial Average Index rose by 1.7% during October, the technology-heavy Nasdaq Composite Index dropped by 5.3% over the month.
Fed leaves rates unchanged: the annualised rate of US inflation climbed from 3.4% in August to 3.7% in September, stoked by high prices for motor fuel, which soared by over 34% year on year. Wholesale inflation rose by 6.3% in September, posting its largest increase since March 2022. The news triggered a fall in Treasury bond yields . The Federal Reserve (Fed) left US interest rates unchanged at 3.75% to 4%. Having raised rates in September, Fed Chair Kevin Warsh commented: “The overwhelming consensus … is that what we’ve done in this monetary medicine is starting to work.”
France under pressure: growing political unrest led to violent protests in France , Germany and Albania , and uncertainty over France’s political outlook and mounting discontent over the state of the country’s public finances pushed up the yield on the benchmark French government bond to its highest level since 2008. France’s economy contracted by 0.1% in the third quarter. While the CAC 40 Index crept up 0.1% over the month, Germany’s Dax Index rose by 2.5%. Inflation in the eurozone climbed from 3.2% to 3.8% year on year in September, representing its highest level for three years.
Japan equity decline: in Japan, the Nikkei 225 Index fell by 5.2% over October as investors rotated away from AI- and technology-related stocks. The Bank of Japan maintained its key interest rate at around 1.25% but commented : “It cannot be said that the economy is growing in a strong and sound manner.”
To view the series of market updates through October, click here
