Weekly investment insights

Weekly investment update

What's been happening in markets?

  • Equities: Equity markets were poor last week. The FTSE 100 fell -0.4%, with Emerging Markets dropping -0.8%. The US fell -2.4% whilst Europe gained +0.7%. The UK fell on lower energy prices impacting the energy names, whilst the European index rebounded following continued strong corporate earnings and low tech exposure. US losses were attributable to weak AI-linked performance following Democrats Mid Term result, likely to slow data centre build out. EM losses were thanks to being a sister trade of AI and being so heavily involved in the supply chain. 
  • Bonds: Bonds rallied globally, with UK gilts adding +1.0%; 10yr UK yield currently 5.16%. US treasuries yield added +0.3%, with 10yr US yield currently 4.87%. Investment Grade bonds added +0.5% whilst High Yield gained +0.6%.
  • Diversifiers: Gold added +5.2% ($4,105), Brent oil fell -17.0% ($98) and Bitcoin fell -7.9% to $74,214.

Key market drivers

  • AI Sell-Off: Last week was the largest US tech sell off since April 2025; Nasdaq fell 5.5% on Thursday; concerns whether CapEx spending will deliver sufficient returns; Democrats will slow data centre build.
  • US Mid Terms: Democrats won both the House and Senate; Republicans aware deportation policies may have been too aggressive; expected to improve Iran negotiations; further data centre regulation.
  • Nvidia Affair: Nvidia CEO, Jensen Huang, was potentially targeted by a Chinese spy who he admits he was having an affair with; concerns re US national security; Nvidia sold off pre-market on Monday.

Chart of the week

Technology shares have come under pressure in recent weeks as investors continue to question the timescale of the major technology companies monetising their enormous investments in data centres. However, this has not yet fully impacted investor sentiment, with fund managers remaining ‘risk-on’ (overweight equities, low cash levels).

This can be seen in the chart above, which shows the performance of the Magnificent 7 – that is, the major US tech stocks – and the remaining 493 stocks in the S&P 500 Index. We refer to this sub-index as the S&P 493. The performance is shown here in Sterling, with dividends reinvested, from the start of the year.

The Magnificent 7 are trading close to the 100 mark. Viewed since the start of the year, they have been extremely volatile but the combined return has been close to 0%. By contrast, the remaining 493 stocks have, on the whole, gained around 15% over the same period. And this shows precisely that the market is currently broadly supported: many investors feared that a price correction in the technology sector could become a problem for the broader market. However, that was not the case.

Investors have therefore not turned their backs on the stock market, but have instead shifted their investments into other, more traditional sectors. Incidentally, the UK is (to a certain extent) also benefiting from this: the FTSE 100 has delivered a performance of 8% since the start of the year thanks to energy, defence, financials and industrials.

Upcoming events

Monday 9th November
  • US: N/A
Tuesday:
  • US: October inflation (forecast 3.7%)
  • US: 10yr Treasury Auction
Wednesday:
  • N/A
Thursday:
  • UK: Q3 GDP (forecast 0.7%)
  • US: Crude oil inventories
Friday:
  • US: October PPI (forecast 0.4%) 

This content is for general information purposes only and does not constitute financial advice or a personal recommendation. Past performance is not a reliable indicator of future results. Investments can rise or fall in value, and you may receive less than you originally invested.

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