Marketing communication
This page contains marketing information
Please see our glossary for information on the financial terms used in this article.
October was a mixed month for investors. Concerns about how much companies are spending on artificial intelligence (AI) led many investors to sell technology shares, while the UK and European stockmarkets, which have fewer tech companies, held up better. Emerging stockmarkets had a tougher month. Conversely, developed market government bonds performed well after a difficult September, as investors looked for safer options amid stockmarket volatility.
Global equities delivered mixed performance in October, as concerns about the level of investment in artificial intelligence (AI), and how it would be funded, led investors to move away from technology stocks. The US Nasdaq Index fell by over 5%, hit hard by disappointing third-quarter company results and high levels of AI-related spending. The share prices of some tech giants including Alphabet, Meta and Intel tumbled. Given its more diversified exposure, the S&P 500 Index fell only marginally. Japan's technology-heavy Nikkei 225 also came under pressure. Stockmarkets with less exposure to technology and more defensive characteristics, including the UK’s FTSE 100 and Europe’s DJ Stoxx 600 were more resilient. In France, however, political and fiscal concerns continued to negatively impact share prices.
Emerging stockmarkets were notably weak. South Korea and Taiwan were hurt as semiconductor stocks declined, while in China, slower economic growth and limited government spending to support the economy weighed on investor sentiment. Brazilian assets also fell sharply following President Lula’s surprise re-election victory. However, India bounced off recent lows.
Developed market government bonds posted solid returns after a tough September, as investors sought safer assets amid equity markets’ volatility. This was despite inflation remaining high, rising energy prices and continued strong US economic growth. French bonds were a notable exception, as political and fiscal concerns increased the gap between French and German government bond yields. Global investment-grade corporate bonds gained, helped by falling sovereign bond yields, but credit spreads widened.
In currency markets, political and fiscal concerns weighed on the euro, while the UK pound strengthened notably. By the end of the month, the UK pound bought around 1.20 euros. Sterling also rallied versus the US dollar and Japanese yen.
October saw another significant rise in the oil price as escalating Middle East tensions, which included Houthi attacks on Saudi Arabia, raised concerns of supply disruption. Among precious metals, the price of gold softened and silver fell heavily.
The views expressed on this webpage should not be taken as a recommendation, advice or forecast, nor a recommendation to purchase or sell any specific security. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser.
The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.
Subscribe to insights
Existing M&G investor? To receive our monthly newsletter with the latest investment insights, update your marketing preferences in My Account or give us a call. You can unsubscribe at any time.
M&G Investment Management Limited (MAGIM), M&G Alternative Investment Management Limited (MAGAIM), M&G Securities Limited (MGSL) and M&G Financial Services Limited (MGFS) are registered in England and Wales under numbers (936683, 2059989, 90776, 923891) respectively. The registered address of MAGIM, MAGAIM, MGSL, and MGFS is 10 Fenchurch Avenue, London, EC3M 5AG. MAGIM, MAGAIM, MGSL, and MGFS are authorised and regulated by the Financial Conduct Authority (“FCA”) under numbers 119328, 122011, 122057, 122058 respectively.