Stay up to date with the latest market trends, economic shifts, and key financial developments across the UK, US, and Asia – helping you guide client conversations with clarity and confidence.
This week's headlines
- US Government shutdown – the US federal government (Fed) entered a shutdown on 1st October 2025 after Congress failed to approve temporary funding. It’s the first since the record-breaking 35-day lapse in 2018–19, and will delay the release of crucial economic indicators, including the September jobs report.
- Weak US employment – payrolls at US companies unexpectedly dropped in September, with wage growth also losing momentum. The Automatic Data Processing (ADP) report highlighted broad weakness across the labour market, with 70% of industries reporting negative hiring.
- OpenAI fuels tech optimism – artificial intelligence startup OpenAI became the world’s most valuable private company, after completing a share sale at a $500bn valuation – a sign of continued investor enthusiasm for AI-driven growth.
- UK business activity falls – Growth in the UK private sector fell to a five-month low, with little expansion overall and a decline in manufacturing output. The Purchasing Managers’ Index (PMI) showed manufacturers continued to cut staff numbers for the eleventh consecutive month across a wide range of industries, which they linked to higher employment taxes, an increased minimum wage, and past energy cost rises.
- Gold momentum continues – Gold prices are set for a seventh consecutive weekly rise, supported by expectations of further US interest rate cuts and concerns over the economic impact of a prolonged government shutdown.
What this means for financial advisers and clients
Stock markets are soaring, reflecting expectations of near-certain Fed interest rate cuts this month. This follows disappointing private payroll job numbers and a pause in further data reports due to the government shutdown. Investors are also expecting a resolution to the shutdown that could see increased US government spending on healthcare, which would further support the economy.
Just as a slowdown in the US economy hasn’t spooked the equity market, the FTSE 100 also continues to rise to new highs despite ongoing sluggishness in the UK economy.
Chart of the week - US payrolls
Source: Bloomberg, ADP Research
Why this matters
The chart above highlights the latest employment data from the US before the government shutdown, showing a weakening trend - US companies cut payrolls for a second consecutive month.
With fresh data now delayed, it’s likely that the Fed will take a cautious approach and favour supportive monetary policy through upcoming interest rate cuts. For advisers, this reinforces the value of positioning portfolios with a focus on long-term goals, rather than reacting to short-term data.
The Markets
UK stocks climb higher
The FTSE 100 hit record highs, boosted by relief that President Trump’s threatened pharmaceutical tariffs may not be as bad as feared. AstraZeneca reclaimed its crown as London’s biggest stock, amid news that it would switch to a dual primary listing in both the US and the UK. While the energy sector slipped with falling oil prices, Tesco surged after raising its profit forecast.
US AI and pharma rally
President Trump’s deal with Pfizer sent pharmaceutical stocks higher, and continued AI optimism led to a rally in tech stocks. Pfizer will sell some of its drugs at lower prices to Medicaid patients on a new direct to consumer website called “TrumpRx.” The deal Pfizer cut with the White House will give the company a three-year grace period on Trump’s planned tariffs on overseas-made pharmaceuticals.
European shares soar
Hopes of softer Fed policy and a healthcare-led rally have helped drive the STOXX 600 to record highs. Mining companies also rose, tracking higher base metal prices.
Asia leads emerging markets
Emerging market equities posted strong gains this week despite holiday closures in some regions. South Korean chipmaker SK Hynix surged nearly 12% after announcing a partnership with OpenAI, signalling the company’s growing role in powering AI technologies.
Oil plummets
Global oil prices have fallen to four-month lows amid oversupply fears, with OPEC+ members signalling potential output increases of up to 500,000 barrels per day in November.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 1.60% | 18.79% |
| FTSE 250 | 1.77% | 9.99% |
| S&P 500 | 0.94% | 7.28% |
| NASDAQ | 1.45% | 11.03% |
| FTSE Developed Europe Ex-UK | 2.73% | 21.65% |
| FTSE Emerging Markets | 2.56% | 16.91% |
| FTSE Japan | -0.83% | 12.20% |
| Brent Crude | -6.74% | -19.99% |
| Gold Spot | 1.87% | 37.34% |
| UK 10yr Gilt yield | -5bps | +13bps |
| US 10yr Treasury yield | -10bps | -48bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 2nd October 2025.
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This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
