Market Quick Take – 31 October 2025

Market drivers and catalysts

• Equities: Tech-led U.S. drop as AI capex jitters hit mega-caps, Europe fractionally lower, Asia mixed with Hong Kong softer
• Volatility: PCE & euro CPI in focus; VIX high-teens; month-end flows
• Digital Assets: ETF outflows weigh on IBIT/ETHA, watch PCE for flows shift
• Currencies: US dollar strong across the board
• Commodities: Third monthly gain led by grains and metals
• Fixed Income: US treasury yields nudge higher after Wednesday’s FOMC-inspired surge
• Macro events: Euro zone flash Oct. CPI, US Oct. Chicago PMI

Macro headlines

• US and China agreed a one-year truce: the US cut the fentanyl tariff from 20% to 10% and extended the pause on reciprocal tariffs; China will resume soybean purchases and rare-earth exports. It stabilises relations but leaves core disputes intact.
• ECB held rates for the third time in October, showing confidence in the eurozone economy and easing inflation. The refinancing rate stays at 2.15% and deposit rate at 2.0%, with inflation near the 2% target. Risks persist from global trade and geopolitical tensions.
• Eurozone economy expanded by 0.2% in Q3 2025, surpassing forecasts of 0.1%. France experienced a 0.5% rise due to increased exports, while Spain grew 0.6% with robust consumption and investment. Germany and Italy stagnated. Annual GDP climbed 1.3%, reducing pressure on the ECB to consider rate cuts amid global uncertainties.
• Germany's inflation rate fell to 2.3% in October from 2.4% in September, surpassing the anticipated 2.2%. Slower price growth in goods, especially food, and accelerated deflation in energy influenced the drop, while services inflation rose slightly, maintaining core inflation at 2.8%. Monthly consumer prices rose by 0.3%.

Macro calendar highlights (times in GMT)

US Government data are impacted by shutdowns and are likely to be delayed

0745 – France Flash Oct. CPI
1000 – Euro Zone Oct. CPI
1230 – US Sep. Personal Spending (likely delayed)
1345 – US Oct. Chicago PMI
APAC Leaders Summit in South Korea (through Saturday)

Earnings events

• Today: ExxonMobil, Abbvie, Chevron, Linde, Tokyo Electron
• Next week’s highlights: Mon: Berkshire Hathaway, Palantir, Vertex Pharmaceuticals | Tue: AMD, Shopify, Arista, Uber, Amgen, Eaton, Pfizer, Spotify, Ferrari | Wed: Toyota, Novo Nordisk, McDonalds, Applovin, Qualcomm, Robinhood, Doordash | Thu: AstraZeneca, Rheinmetall | Fri: Constellation Energy, ConocoPhillips, KKR

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• USA: U.S. stocks fell as higher AI spend and one-offs knocked tech: S&P 500 −1.0%, Nasdaq 100 −1.5%, Dow −0.2%. Meta sank 11.3% after a $15.9bn tax charge and heavier AI capex, while Microsoft slipped 2.9% on the OpenAI hit and elevated AI costs. Offsetting, Alphabet rose 2.5% on a clean beat and Eli Lilly jumped 3.8% after lifting revenue guidance. Financials steadied the tape with selective gains as yields nudged up. After the close, Apple guided to double-digit December-quarter growth on strong iPhone 17 demand, and Amazon popped as AWS growth accelerated—setting up today’s focus on management color around AI spend versus margins.
• Europe: Europe edged lower as policy and prints kept risk contained: STOXX 50 −0.1%, STOXX 600 −0.1%, FTSE 100 0.0%. The ECB left rates unchanged and offered no firm steer on December, while Eurozone Q3 GDP grew 0.2% q/q with France/Spain firm and Germany/Italy lagging. Earnings split sectors: Schneider Electric −3.3% despite higher Q3 revenue and reaffirmed targets; Spanish banks softened with Santander −1.3% and BBVA −1.5% after mixed results; ING rallied 5.7% on a beat and buyback plans, and Airbus gained 2.1% on steady guidance. Attention stays on incoming CPI prints and the breadth of Q3 beats into November.
• Asia: tone mixed into data. Nikkei 225 +0.8% as a steadier yen and chip strength aided sentiment; CSI 300 −0.8% amid caution; Hang Seng −0.2% with property and tech softer. BYD’s Q3 underwhelmed—profit −33% to Rmb7.82bn, revenue Rmb194.98bn (−3%), deliveries −1.8% to ~1.15m, and gross margin narrowed to 17.6% from 21.9%—underscoring China EV price pressure and quality scrutiny. Traders eye China’s October PMIs and Hong Kong Q3 GDP for confirmation of any demand stabilization as year-end approaches.

Volatility

• Month-end starts quiet, not calm. The VIX sits in the high-16s after mid-week jitters, while macro is back in the driver’s seat. Two prints matter today: the US PCE/income & outlays (the Fed’s preferred inflation gauge), and yesterday’s euro area flash CPI (still near 2%) that keeps rate-cut timing in play. Equities also face month-end flows and a heavy earnings slate (energy, healthcare), which can tug indexes without changing the bigger story. If PCE cools, stocks and credit usually breathe; if it’s hot, expect a defensive tilt and stronger USD.
• SPX expected move: options imply ±48.8 points (~0.72%) into the 31-Oct expiry.
• Today’s SPX skew: slightly call-tilted around 6,825–6,860; wings look orderly—no extreme downside pricing.

Digital Assets

• Crypto is steady but cautious at month-end. Bitcoin hovers near $109–110k and Ether around $3.8–3.9k as investors watch today’s PCE print for the next macro cue. Recent US spot ETF flows have leaned negative—bitcoin funds saw net outflows in recent sessions, and ether ETFs posted net outflows yesterday—which has tempered rallies in IBIT and ETHA.
• For longer-term investors, the backdrop is still macro-linked: cooler inflation and calmer rates tend to stabilize flows first in BTC/ETH, then spill over to majors like SOL and XRP.

Fixed Income

• US treasury yields are modestly higher after the Wednesday jump on a hawkish FOMC meeting. The benchmark 2-year treasury yield rose as high as 3.63% yesterday before easing back to 3.61%, while the benchmark 10-year treasury trades up three basis points, just below 4.10%.
• US high yield bonds came under pressure amidst weak risk sentiment and as yield rose, with the Bloomberg index we track of the spread between US treasuries and high yield bonds widening 11 basis points off three-week lows to 278 basis points.
• Japanese government bond yields fell further at the front end of the curve as the market lowered the trajectory of BoJ hikes. The benchmark 2-year JGB yield fell 1.5 basis points to the lowest in two weeks, at 0.92%.

Commodities

• The Bloomberg Commodity Index is heading for its third consecutive monthly gain, trading at its highest level since May 2022. This month’s 2.5% rise has been driven by broad strength across precious and industrial metals as well as grains, while energy and soft commodities lagged. Leading the gains are soybeans (+9.6%), aluminum (+7.2%), and copper (+5.2%), whereas losses are concentrated in sugar (-13.7%), cocoa (-10%), and crude oil (-2.5%).
• Oil is headed for a third monthly drop amid glut concerns, with OPEC+ poised to approve another supply increase this weekend. WTI slid toward $60, down over 3% for the month, while Brent hovered near $65. The group meets on Sunday and is expected to restore more halted capacity to regain market share.
• Gold trades near USD 4,000 after recording its first weekly loss in ten weeks. Initial weakness following the U.S.–China trade deal has eased amid renewed concerns about the long-term relationship between the world’s two largest economies, prompting traders to refocus on the drivers behind gold’s more than 50% rally this year — most of which remain firmly in place.

Currencies

• The US dollar firmed broadly yesterday in a double-take after the hawkish FOMC meeting, with EURUSD challenging the range lows below 1.1550 yesterday before rebounding slightly. Likewise GBPUSD was under considerable pressure yesterday and test below the low since April at 1.3140 before finding support, trading right at that level this morning.
• USDJPY consolidated after hitting a 154.45 high yesterday, trading as low as 153.65 overnight before bouncing strongly later in the Asian session, trading 154.22 in early morning hours.

For a global look at markets – go to Inspiration.