Weekly Insights
20 October 2025
Headline Recap
Markets rebound after tariff scare: U.S. stocks staged a sharp recovery early in the week as President Trump softened his rhetoric on 100% tariffs on China and AI optimism surged.
Credit jitters return: By mid‑week, regional bank losses (Zions, Western Alliance, and others) reignited credit concerns, dragging Wall Street lower and sending European bank stocks down 2.5%.
Gold hits new highs, then pulls back: Gold surpassed $4,300/oz before retreating on a firmer dollar and Trump’s admission that blanket tariffs were unsustainable.
M&A remains active: Deals included Boston Scientific buying Nalu Medical for $533 million, Vienna Insurance Group raising its offer for Bavarian Nordic and Jardine Matheson agreeing to take Mandarin Oriental private.
Economic debates intensify: Economists predicted stronger U.S. growth but sticky inflation and only one more Fed rate cut, while IMF officials warned that eroding trust in central banks could de‑anchor inflation expectations.
What Happened?
After the prior week’s sell‑off, U.S. equity markets started the new week with a relief rally. President Trump tempered his calls for 100% tariffs on Chinese goods, saying a full‑scale tariff would not be sustainable. The shift, combined with Broadcom’s partnership with OpenAI and strong chip‑sector results from ASML, spurred a nearly 10% jump in Broadcom and a 5% rise in the PHLX semiconductor index. By Friday, the S&P 500 gained 1.7% for the week as nine of its eleven sectors advanced and volatility subsided.
Towards the end of the week, regional lender Zions Bancorporation disclosed unexpected loan losses, sending its shares down 13%, while Western Alliance slid 10.8%. Investors already unsettled by elevated valuations and U.S.–China tensions fled financial stocks. The S&P 500 fell 0.63% that session and European banks slumped 2.5%. Credit jitters pushed capital into safe‑haven assets: gold spiked to a record $4,378.69/oz before pulling back later in the week as the dollar firmed and Trump hinted at a meeting with China’s president. Silver, platinum and palladium followed gold’s roller‑coaster, highlighting market fragility.
Macroeconomic signals were mixed. A NABE survey projected U.S. GDP growth of 1.8% in 2025 but expected sluggish job gains and inflation around 3%. Fed officials disagreed on policy: Governor Christopher Waller supported another quarter‑point cut at October’s meeting due to labour‑market weakness, whereas other policymakers urged caution, arguing tariffs contribute only modestly to inflation. At the IMF / World Bank meetings, the fund’s chief economist warned that undermining central bank independence could de‑anchor inflation expectations. Bank of England officials echoed caution; chief economist Huw Pill described the August rate cut as a skip rather than a pivot and urged gradualism.
Deal‑making remained brisk despite market volatility. Boston Scientific agreed to buy neuromodulation specialist Nalu Medical for about $533 million to expand its chronic pain portfolio. Vienna Insurance Group raised its offer for Bavarian Nordic, strengthening its position in European insurance. Jardine Matheson announced plans to take Mandarin Oriental private for $4.2 billion, citing the group’s real estate monetisation. Analysts noted that high valuations and plentiful liquidity are fuelling large deals even as some executives warn of bubble‑like conditions. ETF launches also accelerated, with new leveraged products drawing regulatory attention.
Why it Matters
Technology
The week showcased the dual forces driving tech valuations. AI optimism remains powerful: Broadcom’s collaboration with OpenAI and ASML’s strong results highlight robust semiconductor demand. Yet credit jitters and trade headlines triggered sharp swings in high‑beta names, and Fed officials warned that tariffs add only about 0.5 percentage points to inflation.
For tech SMEs, the message is to balance ambition with prudence; invest in AI capabilities and supply‑chain resilience but avoid over‑leveraging in an environment of elevated valuations and potential regulatory scrutiny. Strategic acquirers should scrutinise deal pipelines, focusing on businesses with defensible intellectual property and diversified customer bases.
Financial Services
Regional bank stresses and soaring investment‑banking fees offer contrasting signals. Zions Bancorporation’s surprise loan losses reignited concerns about hidden credit risk, yet quarterly results from big banks highlighted resilient consumer spending and stable delinquency rates. Jamie Dimon and other executives warned that assets may be in bubble territory even as mergers and public offerings surge.
SMEs should ensure robust credit lines and monitor counterparties’ exposure. Private equity investors will continue to find opportunities in financial infrastructure and specialty finance, but due diligence on leverage and regulatory changes is critical. The pace of new ETF launches illustrates the need for product differentiation and careful liquidity management.
Healthcare
M&A remains a key growth driver. Boston Scientific’s purchase of Nalu Medical expands its neuromodulation and chronic pain portfolio, while Johnson & Johnson’s interest in Protagonist Therapeutics signals that big pharma continues to scout for pipeline assets. Vienna Insurance Group’s bid for Bavarian Nordic underscores insurers’ appetite for vaccine‑related assets.
For healthcare SMEs, this environment offers opportunities to attract strategic investors, but regulatory scrutiny over pricing and data privacy remains intense. Strategic acquirers can leverage valuations to acquire complementary technologies; careful integration and post‑merger planning are essential to realise synergies.
Energy
Oil prices slipped nearly 3% as the International Energy Agency forecast a supply surplus and geopolitical tensions eased, with Trump and Russia’s Vladimir Putin agreeing to another summit and crude inventories rising. Gold’s surge reflects investor anxiety about geopolitical risk and monetary policy.
For energy SMEs, lower crude prices may reduce costs but also compress margins for upstream producers. The energy transition continues to accelerate, with investors favouring companies offering green technologies and carbon‑reduction strategies. Strategic acquirers should watch for distressed opportunities in conventional energy and invest in storage, grid modernisation and renewable capacity.
Manufacturing
Manufacturers face a bumpy ride. European banks’ sell‑off spilled into industrials, and tariffs remain a threat to supply chains. Continental AG beat sales forecasts, yet the IMF cautioned that trade barriers could hurt growth and de‑anchor inflation expectations. Bank of England officials noted that productivity growth is weak and that tariffs may harm growth more than they raise prices.
Manufacturing SMEs should diversify suppliers, hedge currency risk and invest in automation to offset labour shortages. Acquirers may find attractive targets among specialised producers with strong export niches; careful valuation is needed to account for potential tariff impacts.
Looking Ahead
This week brings several catalysts. Third‑quarter earnings from Tesla, Netflix, Procter & Gamble, Coca‑Cola, RTX and IBM will test whether corporate profits can sustain market valuations. The delayed U.S. consumer price index report will finally provide an official read on September inflation. With the Federal Reserve set to meet on 28–29 October, investors expect another quarter‑point cut after Waller’s comments, but any upside surprise in CPI could unsettle that expectation.
U.S.–China diplomacy will remain a focal point as Trump plans to meet President Xi in South Korea. In Europe, flash PMIs for October and the ECB’s tone will signal whether further rate cuts are likely. UK inflation and wages data are due, and Bank of England officials will update their guidance on the pace of cuts.
For SMEs, staying informed on policy shifts, currency volatility and sector‑specific earnings trends is crucial in positioning for the final quarter of the year.
WHSP Perspective
At Wreath Hall Strategic Partners, we view the week’s crosscurrents (relief rallies, credit jitters, record‑breaking gold prices and active deal‑making) as a reminder of the dynamic environment facing SMEs and strategic investors. Market sentiment can shift quickly when valuations are high, underscoring the need for rigorous scenario planning, disciplined capital allocation and proactive risk management.
Whether you are evaluating an exit strategy, pursuing acquisitions or seeking to optimise your valuation, our team combines financial modelling, market research and industry expertise to help you navigate uncertainty and unlock value. Contact us to discuss how we can support your strategic ambitions.
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 is an interpretation of the moment when astronomers first watched a black hole tear a passing star apart, hurling its debris into darkness. Led by Dr. Itai Sfaradi and Prof. Raffaella Margutti, an international team announced the find in October 2025 after catching the off‑centre event with radio arrays. Designated AT 2024tvd, it unfolded far from any galactic core (an unprecedented location) and the brilliant, fast‑changing radio signals that followed hinted at powerful, delayed outbursts, offering a rare glimpse into how such hidden black holes feed and release their energy.
