Weekly Insights
27 October 2025
Headline Recap
Record highs on cool inflation and earnings: All three major U.S. stock indexes closed at all‑time highs on Friday as September consumer prices rose less than expected and more than four‑fifths of reporting companies beat both earnings and revenue estimates.
Policy cross‑currents intensify: Markets now see a quarter‑point U.S. rate cut at this week’s Federal Reserve meeting, but officials remain divided on how far and fast to ease; renewed talk of sweeping U.S. export curbs on goods containing American software unnerved investors mid‑week.
U.S.–China thaw? Officials from Washington and Beijing sketched a framework to pause Trump’s threatened 100% tariffs and delay China’s rare‑earth export controls ahead of a Trump–Xi meeting in South Korea.
M&A surge continues: Novartis agreed to buy Avidity Biosciences for about $12 billion to bolster its rare‑disease portfolio; SoftBank approved a further $22.5 billion investment in OpenAI, contingent on restructuring; U.S. natural‑gas and LNG deals have already topped $30 billion this year amid soaring AI‑driven power demand.
Europe joins the rally: London’s FTSE 100 and the pan‑European STOXX 600 both reached record highs as cooling U.S. inflation stoked hopes of coordinated rate cuts and NatWest’s earnings lifted financials.
What Happened?
The week began with markets on edge after a Reuters report revealed that Washington was considering sweeping new export controls covering goods manufactured with U.S. software. The proposed retaliation against China’s rare‑earth restrictions rattled technology stocks and stoked fears of a fresh trade escalation. Equity indices drifted lower through Tuesday as investors weighed the potential impact on global supply chains.
Sentiment improved mid‑week when earnings season accelerated. Alphabet shares rose on news that Anthropic would use Google’s AI chips, and Ford jumped more than 12% after reporting robust results. Analysts noted that 87% of U.S. companies beating earnings and 83% beating revenue estimates had helped underpin the rally. Meanwhile, U.K. equities gained after NatWest’s positive earnings and expectations that cooler U.S. inflation would allow the Bank of England to cut rates in December.
On Thursday, news out of the ASEAN summit provided a geopolitical reprieve. U.S. Treasury Secretary Scott Bessent and Chinese officials agreed on a framework trade deal that would pause the 100% tariffs threatened by President Trump and delay Beijing’s rare‑earth export controls by a year. The deal sets the stage for a face‑to‑face meeting between Trump and Xi Jinping during the Asia trip and suggests a path toward de‑escalation in the trade war.
Markets roared higher on Friday after the U.S. consumer price index for September rose 0.3% month‑on‑month and 3.0% year‑over‑year; both slightly cooler than expectations. The benign reading, combined with strong corporate results, effectively locked in a quarter‑point rate cut at the Fed’s Oct 28–29 meeting and pushed the S&P 500 and Nasdaq to record closes. European equities joined the party: the FTSE 100 vaulted to its highest ever close.
The week also saw notable transactions. Novartis unveiled a $12 billion takeover of Avidity Biosciences to expand its pipeline for rare muscle disorders. SoftBank approved an additional $22.5 billion investment in OpenAI, bringing its total commitment to $30 billion and underscoring the race to fund AI platforms. In the energy sector, U.S. shale gas and LNG dealmaking surged as data‑centre demand and rising exports fuelled $30 billion in year‑to‑date transactions.
Why It Matters
Technology
Earnings from Alphabet and Ford highlight how AI and advanced chips remain powerful catalysts. Anthropic’s decision to adopt Google’s AI chips, coupled with ASML’s robust results, underscores resilient semiconductor demand. SoftBank’s renewed bet on OpenAI signals that venture investors are still ploughing capital into generative‑AI platforms despite heightened scrutiny. However, the mid‑week jitters around potential U.S. export curbs show that tech supply chains are vulnerable to policy shocks.
For tech SMEs, the lesson is to invest in AI capabilities and diversify sourcing while resisting the temptation to over‑leverage at lofty valuations. Strategic acquirers should focus on targets with defensible intellectual property and broad customer bases, and carefully assess exposure to trade restrictions.
Financial Services
Investment banking is back in high gear. Lazard’s third‑quarter advisory revenue jumped 14 % as M&A and restructuring activity surged, and the bank hired 20 new managing directors to meet demand. Meanwhile, the natural‑gas sector’s $30 billion deal binge offers fertile ground for project finance and capital‑markets work. On the other hand, U.S. policymakers remain split on rate cuts; a dovish Fed could support credit markets, while continued trade risks may trigger sudden repricings.
SMEs should secure robust credit lines and monitor counterparties’ exposure to geopolitical shocks. Private‑equity investors should maintain discipline on leverage levels and liquidity as deal momentum persists.
Healthcare
Novartis’s takeover of Avidity Biosciences shows large pharma’s appetite for pipeline assets amid looming patent cliffs. The 46% premium paid signals that well‑positioned biotech firms can command attractive valuations.
For healthcare SMEs, this environment offers opportunities to attract strategic investors, but compliance, pricing scrutiny and data‑privacy regulations remain intense. Strategic acquirers should prioritise targets with differentiated science, a clear regulatory path and synergy potential, while planning integration carefully to realise value.
Energy
The energy landscape is being reshaped by AI. Surging power demand from data centres and growing LNG exports have driven U.S. natural‑gas and LNG deal values to $30 billion, compared with $22.5 billion a year earlier. Oil prices climbed after new U.S. sanctions on Russian companies and the prospect of a trade détente with China, but remain below mid‑year highs.
For energy SMEs, lower natural‑gas prices could squeeze upstream margins but create opportunities for midstream infrastructure and storage. The energy transition continues to accelerate; investors favour firms offering carbon‑reduction technologies and resilient supply chains.
Manufacturing
Manufacturers are navigating a complex mix of tailwinds and headwinds. On the positive side, cooler U.S. inflation and hopes of coordinated rate cuts have boosted demand for capital goods. European manufacturers cheered the FTSE 100’s record close and strong U.K. consumer spending. But the threat of sweeping export curbs on goods containing U.S. software adds a new layer of supply‑chain risk.
Manufacturing firms should diversify supplier bases, hedge currency exposure and invest in automation to maintain competitiveness. Acquirers can find value in specialised producers with strong export niches, but careful due diligence is necessary to account for potential tariff and regulatory shocks.
Looking Ahead
This week’s calendar is packed. On 28–29 October, the Federal Open Market Committee meets; markets overwhelmingly expect a 25‑bp rate cut, but any hawkish surprises could whipsaw bonds and equities. Earnings from the Magnificent Seven will test whether recent optimism is justified.
Across the Atlantic, the European Central Bank and Bank of England will signal whether they are ready to follow the Fed’s easing path. Flash PMIs, U.S. GDP data and the long‑awaited September inflation report will provide fresh clues on growth and price pressures. Finally, all eyes will be on South Korea, where Presidents Trump and Xi plan to meet to finalise a truce in the trade war.
SMEs and investors, staying agile amid policy shifts, currency volatility and changing sector dynamics will be crucial as the year draws to a close.
WHSP Perspective
At Wreath Hall Strategic Partners, we see the past week’s record highs, trade diplomacy and deal surge as reminders of the dynamic landscape confronting SMEs and strategic investors. Market sentiment can pivot quickly when valuations are stretched. Rigorous scenario planning, disciplined capital allocation and proactive risk management are essential to navigate such cross‑currents.
Whether you’re evaluating an exit, pursuing acquisitions or seeking to optimise your valuation, our team combines financial modelling, market research and execution expertise to help you unlock value and seize opportunities.
Image of the Week
Each week, we highlight a striking image that captures the spirit of global markets, whether through business, art, or the unexpected.
This week’s image captures California (IKB 71), a 1961 blue monochrome by French artist Yves Klein, which sold at Christie’s Paris on 24 October 2025 for €18.4 million ($21.4 million), setting a new French auction record for the artist. Measuring over 14 feet wide, the canvas embodies Klein’s quest to make pure colour a subject in itself. Covered with his patented International Klein Blue (IKB) pigment (a luminous ultramarine bound in synthetic resin) the surface radiates depth and texture, drawing viewers into what Klein described as “the immaterial sensibility of space”.
