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The FTSE 100, which ended the third quarter of 2025 up 6.7%, continuing to beat the S&P 500 over the year.
The third quarter ended with the USA once again in the spotlight. On the Friday before the month end, Donald Trump announced another round of tariffs. These included 100% on pharmaceuticals and, somewhat bizarrely, 50% (reduced to 25% by the following Tuesday) on wooden kitchen cabinets under a law designed to counter national security threats. At the end of September, the US Government entered shutdown, with Congress unable to agree a budget for the new financial year starting on 1 October. The shutdown is the first since 2018, when Trump 1.0 experienced a 35-day closure. Despite this chaotic background, global markets shrugged and carried on with business as normal. The insouciance of the markets shows up in the Q3 table below:
The S&P 500 rose 7.8% over the quarter, closing just off yet another all-time high, established on 22 September. Year-to-date the index is up about 13.7%, but that hides a miserable performance for the dollar.
The equal weighted S&P 500 rose 4.4% over the quarter and 8.4% year-to-date, underlining that it is the heavyweight stocks which continue to drive growth.
The performance of the FTSE 100 in the third quarter was a decent rise of 6.7%. After outperforming the FTSE 100 in the Liberation Day afflicted second quarter, the FTSE 250 underperformed in the third quarter, rising just 1.8%. The FTSE Small Cap index turned in a similar performance.
Across the Channel, EU markets overall posted inferior gains to the FTSE 100, with the Euro Stoxx 50 up 4.3% over the quarter. Germany had a dull quarter, with the DAX flatlining after a strong start to the year. In France the defenestration of another Prime Minister did not stop the CAC 40 adding 3.0% over the quarter, just to add salt to the German wound.
The 12.1% performance of emerging markets reflects buoyant performance from China, Korea and Taiwan, which together account for about 60% of the Index. While the US dollar index (DXY) was little changed over the quarter, its fall in the first six months of 2025 has benefited emerging market economies, reducing import costs (mostly priced in US dollars) and the value and servicing costs of outstanding US $-denominated debt.
In sterling terms, the MSCI ACWI global index was up 9.2% over the quarter, and 8.9% year-to-date. That its 2025 performance is well behind the FTSE 100 (up 14.4% year to date) is once again a reflection of the weak dollar, down 7% against sterling, year to date).
Source: Techlink Professional. This is a news bulletin and is up-to-date as of the date of publishing. Please check the publishing date at the top of the article.
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