Partner Bank AG: Securities Market Commentary Issue 11/25

•   Agreement in US trade conflict with China boosts stock markets worldwide

•   Federal Reserve's renewed interest rate cut boosts stock market rally

•   Gold price correction brings calm to overheated upward trend

The past month brought extremely positive results for the stock markets. Once again, investments in the tech sector achieved the best performance. 

The fact that the hype surrounding artificial intelligence continues unabated is most clearly demonstrated by the rise in the share price of Nvidia, which became the first company in the world to achieve an almost unbelievable market capitalisation of five trillion US dollars. 

However, the risk-on sentiment among investors in the US also affected all other market segments, which is why, in addition to the technology-heavy NASDAQ, both the market-wide S&P 500 and the value-oriented Dow Jones Industrial Average index climbed to new highs in October. 

Measured by the Euro Stoxx 50, eurozone equities also recorded new all-time highs in the wake of this rally. 

The prevailing stock market momentum was supported above all by the hoped-for agreement in the trade conflict between the United States and China and a further cut in key interest rates by the US Federal Reserve.

Fundamentally, the picture is also positive overall. The International Monetary Fund (IMF) has estimated  real global economic growth for the coming year at just over three per cent.  

For the United States, the largest and most important economy, the expected GDP growth is 2.1 per cent, while the expansion rate in the eurozone is likely to be just over one per cent. 

Of course, these are only forecasts, which may change over time, but from today's perspective at least, these figures do not indicate any signs of recession, which is considered to be decisive for the further development of the stock market. 

Looking at the current earnings estimates of companies for the US market (S&P 500), slightly improved growth of around 13 per cent is even expected in 2026. According to forecasts, technology companies are  once again expected to generate  the highest profits.  

For Europe, on the other hand, the forecasts are somewhat more complicated because the exact impact of the Trump administration's tariff policy is still difficult to predict.

Regardless of this, the favourable valuation continues to speak in favour of equity investments in Europe, which, despite the excellent performance this year, is significantly below that of the American market with a forward P/E ratio of 15.

Emerging markets are currently attracting particular attention again, having returned to the focus of international investors after a long period thanks to their similarly low valuations. 

The growth prospects are particularly impressive, with the IMF forecasting four per cent growth for all emerging markets combined in 2026. 

The two most important countries in this regard are China and India, with forecasts of 4.4 and 6.2 per cent respectively. China in particular offers an attractive investment opportunity for many in this regard, with its valuation remaining favourable.

US Federal Reserve cuts key interest rates for the second time in 2025

After the Federal Reserve cut interest rates for the first time this year last month, it has now lowered them again by a further 25 basis points. 

Although this move was in line with general market expectations, the central bank is likely to have been divided on this step in view of rising inflation rates, which is why a further reduction towards the end of the year appears highly uncertain.  

The Fed justified this move by pointing to signs of a slight slowdown in the labour market, which is attributable to the US central bank's dual mandate of ensuring price stability and full employment. 

Necessary correction on the gold market

Following the extraordinary acceleration in the price of gold in the first half of the month, which was due to massive inflows into investment vehicles (ETFs, ETCs) and speculative activity, a "healthy" correction occurred, leading to a calming and stabilisation of the market. 

"Overheating" of this kind is counterproductive for any upward trend and must sooner or later lead to consolidation.   

Nevertheless, compared to the end of September, gold was still well up on a monthly basis, with a price of over US$4,000. 

This means that gold's annual performance in dollars is over 50 per cent, which means that the precious metal has even outperformed the S&P 500 over a ten-year period. 

Central bank purchases will remain an important price driver again this year and are likely to be on a similar scale to previous years. 
Consequently, the underlying price trend should remain intact given the ongoing diversification of foreign exchange reserves in many emerging markets.

Stock markets in October 2025

Thanks to the continued appeal of technology stocks, the NASDAQ 100 index gains almost five per cent, outperforming all other stock market barometers. 

The slight appreciation of the US currency also means that US stocks generate additional gains for euro investors.      
Change in October 2025 (all figures as total return values including dividends)

Source: Bloomberg, own representation
Risk warning: Past performance is not a reliable indicator of future developments.