One Four Nine Portfolio Management – Quarterly market commentary – September 2025
Complex and changing picture for global markets.
The summer months have shown a complex and changing picture for global markets. As we examine the period from June to August, a key theme has been the fragile balance between strong economic activity and ongoing geopolitical and fiscal tensions. After a volatile second quarter shaped by the initial shock of US trade tariff announcements, markets stabilised in July and August as negotiations offered temporary relief and clearer direction.
Across the globe, the focus has shifted. While central banks seem to be nearing the end of their rate-cutting cycles, concerns about fiscal policy and government debt sustainability have moved centre stage, influencing bond yields and investor sentiment. In the US, markets absorbed mixed signals. The second-quarter earnings season was largely positive, surpassing muted expectations, and business surveys indicated optimism. However, a slowdown in the labour market and renewed doubts over the independence of the Federal Reserve introduced fresh uncertainty. The US dollar showed some weakness, while US equities, particularly technology stocks, continued to be buoyed by enthusiasm for artificial intelligence, despite emerging questions about its immediate revenue impact.
In the UK, the economic landscape remains challenging. Inflation proved stickier than anticipated, leading the Bank of England to adopt a more cautious tone, even as it delivered a rate cut. This tempered expectations for future easing and placed upward pressure on gilt yields, reflecting ongoing concerns about the UK’s fiscal position. Similarly, the Eurozone experienced a mixed quarter. While resilient activity data and strong corporate earnings in certain sectors were encouraging, political instability, particularly in France, created volatility and negatively impacted market performance.
Asian markets offered a more positive story. Japanese equities performed strongly, benefiting from a favourable US trade deal and better-than-expected economic growth. In the wider Asia ex-Japan region, markets made solid gains as tariff fears eased. China’s performance was notably strong in August, supported by an extended trade truce with the US and government initiatives to bolster its domestic technology sector. Emerging markets broadly benefited from a weaker US dollar and progress on trade talks, although country-specific issues, such as the impact of US tariffs on India, created divergence in performance.
Read our comprehensive 22-page quarterly market commentary – September 2025 below.
The value of investments and any income they produce can fall as well as rise. You may get back less than you invested.
