Global stock markets ended October on a positive note in the wake of trade agreements between China and the US, interest rate cuts, stable corporate earnings reports, and more positive growth indicators for the global economy. The MSCI World rose just over 2.5% and the S&P 500 rose just under 2.3%. In Sweden, the krona strengthened and the OMXS30 advanced nearly 4% to a new high.
The Federal Reserve cut its key interest rate by 0.25 percentage points to 3.75-4.00%, the second consecutive cut, while the ECB and the Riksbank chose to hold steady. The prospect of a softer monetary policy environment, combined with marginally falling market interest rates, clearly supported risk appetite.
The reporting season reinforced the positive trend. Q3 results were generally strong and earnings estimates for 2026–2027 were revised upward, which, together with declining volatility and more optimistic sentiment indicators, drove global equities to new highs. Overall, the upturn was driven by a milder trade tone, a more supportive central bank stance, strong reports with rising profit expectations, and lower volatility—factors that together outweighed the concerns.
In the background is a global economy that has held up well. Most macro indicators point to solid global growth, with labor markets remaining strong and household consumption stable. The fact that corporate earnings in the third quarter largely exceeded expectations confirms that quality, efficiency, and competitiveness pay off. In addition, the easing of trade tensions at the end of the month – in the form of an agreement between the US and China – provided welcome relief for global trade, especially for export-dependent companies and sectors with complex supply chains.
Developments in October confirm for us at Nordic Equities the importance of being fact-based, thinking long-term and focusing on quality. In a market where temporary themes can dominate and investor sentiment can shift quickly, it is crucial to focus on companies that can navigate different market conditions—companies that continue to create value and grow even in times of uncertainty. It is the sustainably profitable companies – with stable cash flows, strong balance sheets and a proven ability to deliver earnings growth – that provide good returns in the long run.
