week ending 30th October 2026.

As shown in the accompanying table, global equity markets posted a more positive performance over the week, with Europe and the UK proving relatively resilient despite weaker returns from the U.S. and emerging markets. Regional sentiment was supported by strong earnings from energy companies, while results across other sectors were more mixed. Investors remained increasingly focused on companies’ forward guidance and longer-term growth prospects, with results that merely met expectations receiving a subdued reaction. Meanwhile, renewed volatility among large U.S. technology stocks weighed on broader market sentiment.

In the UK, Chancellor John Healey delivered his Autumn Budget on Wednesday 28^th October. The announcement proved relatively uneventful, with financial markets showing little reaction. For further analysis of the Budget and its implications for investors and financial planning, please visit the my wealth private news page. 

Perhaps of greater interest was the Federal Reserve’s decision to leave interest rates unchanged at 3.75%–4.00%, following September’s 25-basis-point increase. The decision was not unanimous, with two of the twelve voting members favouring another rise. Fed Chair Kevin Warsh acknowledged that inflation remains elevated but highlighted economic growth remains strong, supported by consumer spending and business investment. Policymakers indicated that further data would be needed before deciding whether additional tightening was necessary.

The latest figures reinforced this cautious approach. September’s core Personal Consumption Expenditures (PCE) inflation measure, the Fed’s preferred gauge of underlying price pressures, rose 0.3% month-on-month, while the annual rate edged up to 3.1% from 3.0%. Meanwhile, the U.S. economy expanded by an annualised 3.4% in the third quarter, exceeding expectations. Strong consumer spending and investment in technology-related equipment helped support growth.

Taken together, the figures suggest the economy remains on a solid footing, although persistent inflation and elevated energy costs could keep interest rates higher for longer.

Corporate earnings remained a key area of investor attention, especially among the largest U.S. technology firms. AI related tech stocks advanced early in the week, recovering some of the previous week’s losses as stronger-than-expected earnings, and positive management outlooks reinforced confidence in future demand. However, gains faded later in the week after quarterly reports from several companies tempered market enthusiasm. Alphabet shares fell sharply after earnings disappointed, despite strong growth in its cloud business, as heavy investment in artificial intelligence put pressure on free cash flow. Microsoft received a more favourable response, supported by strong results and continued growth in Azure. Amazon also came under pressure, with mixed results, strong growth in cloud and computing but investors were disappointed by weaker than expected revenue. Intel shares declined following weak guidance and softer PC demand.

These results do not detract from the longer-term growth outlook. Demand for cloud computing and AI infrastructure remains robust, although investors are becoming more focused on the pace at which investment converts into earnings and cash flow.

Elsewhere, the European Central Bank (ECB) held its deposit rate at 2.50% on Thursday 29^th as widely expected, despite growing concerns surrounding inflation. Policymakers also acknowledged that rising borrowing costs are already tightening financial conditions, potentially reducing the need for further immediate intervention. Eurozone economy demonstrated some resilience expanding by 0.4% in the third quarter, exceeding expectations of 0.2%. Nevertheless, additional rate increases remain possible should elevated energy prices begin feeding through more broadly into wages and consumer prices.

Looking ahead, attention turns to the U.S. midterm elections on Tuesday 3^rd November, with the results potentially influencing President Trump’s legislative agenda and fiscal policy. Investors will also be watching Wednesday’s Eurozone inflation figures and Friday’s U.S. employment report. In the UK, the Bank of England meets on Thursday 5^th  November, with a 25-basis-point increase to 4.00% widely expected. Its updated forecasts and guidance on the outlook for further rate rises will be closely watched.

Kate Mimnagh, Portfolio Economist