MARKETS IN A NUTSHELL — FOR SEPTEMBER 2025

Markets commenced September full of optimism and ended it euphoric. The US Federal Reserve cut rates for the first time in a year, Wall Street set new records again, and Chinese technology shares rediscovered their swagger. Yet behind the market cheer, global growth may be faltering, and valuations look uncomfortably rich. 

The US provided both the stimulus and the drama last month. The Fed cut its benchmark rate after a run of weak jobs figures and slumping consumer sentiment. The decision was not just data driven. President Trump’s attempt to fire Governor Lisa Cook — now contesting her dismissal in court — underlined how monetary policy has become another theatre for partisan skirmishes. 

Yet markets chose to celebrate, not fret. While the dollar traded weaker, US bond yields fell and bond prices rose, and equities soared to record highs. US Big Tech once again led bourses, with Nvidia’s embrace of OpenAI fuelling the artificial intelligence craze. Small-cap stocks were also buoyant, with the leading US small cap stocks index achieving all-time highs — a curious show of confidence in an economy that very much looks late cycle. Risk premia in corporate credit markets are now paper-thin. 

Meanwhile, Chinese stocks staged a comeback. After years of regulatory gloom, Beijing has discovered the virtues of cheerleading. State support for chips and artificial intelligence has powered a furious rally in its internet champions. The Hang Seng Tech Index is up by more than 40% this year, outstripping the gains on US tech stocks. For once, emerging markets have outpaced developed peers — a reversal of fortunes that investors had all but given up on.

Commodities added their own colour. Gold — still the world’s favourite hedge — again broke records. Silver, platinum and palladium followed suit. Oil traded lower, a nod to weakened demand. Copper gained after a supply shock at major global producer, Freeport-McMoRan.

The Foord global funds again performed near the top of their sectors. The Foord Global Equity Fund is up 25% in US dollars this year, the Foord International Fund is up 28%, and the Foord Asia ex-Japan Fund has gained an eye-popping 40% this year. 

September’s rate-cut rally has given investors reasons to smile. But markets around the global are priced for perfection. Investors in corporate credit markets are being paid less to take risk than at any other point this century. In our view, caution remains the wiser companion to exuberance. We are accordingly still avoiding the frothiest areas of the market, and looking to protect investor capital as investment risks rise.