Commentary

In the US, the S&P 500 rose, driven by utilities and real estate sectors, while energy stocks declined due to easing concerns over Israeli attacks on Iranian oil infrastructure. Smaller-cap indexes like the Russell 2000 and S&P MidCap 400 outperformed the S&P 500. The Nasdaq Composite rallied, bolstered by strong quarterly results from TSM and Netflix. US Treasury yields fluctuated, influenced by lower housing starts and building permits, while the bank loan market saw high issuance. Consumer spending showed strength with a 0.4% rise in retail sales for September, while industrial production fell 0.3%. Initial jobless claims dropped unexpectedly, despite earlier spikes due to hurricane disruptions.

In Europe, the STOXX Europe 600 Index gained 0.58%, supported by a second consecutive interest rate cut by the European Central Bank (ECB). Major European stock indexes, including Germany’s DAX and Italy’s FTSE MIB, posted gains. The ECB reduced its key deposit rate to 3.25%, with expectations for further rate cuts to support the economy.  Inflation in Eurozone stood at 1.7% in September and the ECB forecasts inflation to rise before stabilizing near its 2% target in 2025. UK inflation eased to 1.7%, its lowest since April 2021. UK wage growth slowed, signaling a potential rate cut from the Bank of England.