The Saxo Weekly Market Compass
27 October 2025 (recap week of 20–24 October 2025)
Where markets have been — and where they’re heading.
Headlines & introduction
Markets closed the week on a high as softer US inflation, renewed US–China trade optimism, and solid corporate earnings lifted global sentiment. The S&P 500 reached record territory, volatility eased to pre-summer levels, and tech regained leadership. European equities mirrored the move, while Asia benefitted from political clarity in Japan and steady Chinese data. Crypto and commodities reflected risk-on appetite as investors positioned ahead of this week’s key Federal Reserve decision and Big Tech earnings.
Market tone: cautiously confident, with volatility resetting lower and rate-cut bets firming.
Equities
Tech and trade relief carried global equities to fresh highs.
The S&P 500 rose 0.8% to a new record high near 6,740, while the Nasdaq 100 gained 1.0%, the Dow Jones Industrial Average added 0.3%, and the Russell 2000 advanced 0.6% as small-caps showed tentative catch-up. Softer inflation, easing tariff risks, and strong corporate results fuelled the advance. Ford jumped 12% on upbeat guidance, Intel beat forecasts with a revenue rebound, and Tesla gained 2% after better-than-feared delivery numbers. Honeywell and American Airlines rallied on solid results, while Netflix and Texas Instruments lagged, underscoring uneven sector strength.
In Europe, the STOXX 600 added modestly and the FTSE 100 closed at a record. The Netherlands’ AEX reached a new all-time high near 979, Belgium’s BEL 20 touched 5,047, and Germany’s DAX hovered close to its peak of 24,641. France’s CAC 40 climbed past 8,200, driven by luxury heavyweights LVMH, Hermès, and Kering as investors rotated into high-margin exporters. Across the region, industrials, luxury, and energy names led gains. Asia also ended firm — Japan’s Nikkei 225 and Hong Kong’s Hang Seng advanced on optimism around US–China trade talks.
Market pulse: record-setting benchmarks and resilient earnings reinforced optimism, though gains remain narrow and megacap-driven.
Volatility
From fear to focus as the VIX slides.
Volatility dropped steadily through the week, with the VIX moving from above 18 to around 16 as trade and inflation worries eased. Short-term hedging measures like VIX9D fell nearly 10%, signalling reduced demand for protection. Still, implied moves around the S&P 500 remain moderate (≈ ±1.4%) into Fed week — calm but not complacent.
Market pulse: options pricing shows confidence but little room for disappointment.
Digital assets
Crypto rallied on policy clarity and softer inflation.
Bitcoin climbed above $111 000 and Ethereum near $4 000, buoyed by macro relief and regulatory progress in Europe. ETF-linked flows remained steady, and risk appetite improved across digital assets. The advance remains tied to broader market sentiment rather than isolated crypto dynamics.
Market pulse: macro relief and regulatory progress kept crypto buyers engaged.
Fixed income
Yields rebounded as risk sentiment improved.
US Treasury yields edged higher into the weekend as investors rotated out of safety ahead of policy events. The 10-year yield settled near 4.0% and the 2-year around 3.48%, implying modest rate-cut expectations. In Europe, German yields rose with the Schatz near 1.97%. Japan’s JGBs held steady despite inflation pressures.
Market pulse: bonds face headwinds from stronger risk sentiment but remain anchored by rate-cut hopes.
Commodities
Energy strength offset precious-metal fatigue.
Brent crude surged above $65 on supply-tightening worries and demand optimism. Energy topped weekly gains (+6.7%), while gold slipped toward $4 000 as safe-haven demand waned. Base metals and grains rose modestly, reflecting the shift into cyclicals.
Market pulse: oil regained momentum while metals paused after an extended rally.
Currencies
Dollar steady, yen weak, krone firm.
The USD held broadly as the market balanced risk appetite with rate expectations. USDJPY tested 153 before easing, while the yen remained under pressure amid muted BOJ tightening signals. The Norwegian krone strengthened on higher oil prices (EURNOK ≈ 11.59), and the AUD pressed toward 0.6550 on improved trade-deal sentiment.
Market pulse: FX markets are calm, with moves driven by yield spreads and commodity flows.
Key takeaways
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Major US indices hit new records: S&P 500 +0.8%, Nasdaq +1.0%, Dow +0.3%, Russell 2000 +0.6%.
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AEX, BEL 20, DAX, CAC 40, and FTSE 100 also reached or neared record highs.
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Earnings beats from Ford, Intel, and Honeywell lifted sentiment; Netflix and Texas Instruments underperformed.
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Volatility dropped toward mid-teens as risk-aversion faded.
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Crypto advanced with macro tailwinds and regulatory cues.
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Treasury yields rose modestly amid improving sentiment.
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Oil surged above $65 while gold paused near $4 000.
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USD stable; JPY weak; NOK and AUD stronger.
Looking ahead (week of 27–31 October 2025)
Fed meets as megacap earnings land mid-week.
The FOMC meets 28–29 Oct, with markets leaning toward a 25 bp cut. Chair Jerome Powell’s tone on inflation, labour softness, and quantitative-tightening will set the near-term path. Data delays from the government shutdown mean forward guidance may carry extra weight. Key US prints include Case-Shiller home prices and consumer confidence (Tue), pending home sales (Wed), and jobless claims and Q3 GDP (Thu).
Earnings concentration raises single-night gap risk.
Microsoft, Alphabet, and Meta report Wednesday; Apple and Amazon follow Thursday — putting roughly $15 trillion in market capitalisation under the spotlight. Investors will focus on AI cap-ex, cloud growth (Azure, GCP, AWS), margins, and holiday guidance. With implied volatility compressed, even small misses could drive sharp reactions.
Europe watch: expectations, policy tone, and read-throughs.
The ECB’s consumer expectations survey and IFO readings will shape Thursday’s policy session, where a hold is expected. Corporate earnings in energy, luxury, and industrials will test margin resilience into year-end. UK retail sales and Euro-zone PMIs will offer additional demand clues.
Asia and commodities in focus.
China’s manufacturing PMI (Thu) and Japan’s industrial output (Fri) may reveal whether policy support is translating into production gains. Oil commentary from OPEC+ and supply developments remain key for the commodity cycle.
Note on trading hours (EU ↔ US, 27–31 Oct):
Europe has returned to standard time (CET), while the US remains on daylight time until Sunday, 2 Nov. This means US regular trading hours (09:30–16:00 ET) run from 14:30–21:00 Brussels time this week — one hour later than usual until US clocks switch.
Market pulse: a binary, event-heavy week — policy guidance and Big Tech delivery will decide whether October’s momentum extends or resets.
Conclusion
The week closed with risk appetite restored, volatility subdued, and equities setting records. Yet beneath the calm surface, positioning is heavy in a few leaders and macro visibility remains clouded by politics and delayed data. The coming week could act as a pivot point: if guidance from the Federal Reserve and earnings from the megacaps reinforce the soft-landing narrative, momentum may stretch further. But any hawkish tone, earnings misses, or trade-policy surprises could quickly test valuations. Investors face a delicate choice — lean into the rally or trim exposure ahead of a high-stakes week.