The Month in a Minute
September was a mixed month for markets. Bond prices fell as concerns about inflation and government borrowing pushed long-term yields higher. Helped by big tech and AI, US markets held up relatively well, while UK, European, and many Asian markets came under pressure.
Tech shines as bonds struggle
It was a mixed month for markets, as the S&P 500 dropped slightly – but the tech-heavy Nasdaq reached a new all-time high.
Bonds had a tougher month as concerns over inflation, government debt, and higher energy costs led to a global selloff, pushing long-term US Treasury yields (the return investors can earn from US government bonds) above 5%.
Central banks added to the uncertainty. The European Central Bank and US Federal Reserve raised interest rates, with the Fed increasing rates for the first time since July 2023. The Bank of England held rates steady but left the possibility open for a future rise.
Elsewhere, renewed tension between the US and Iran pushed oil prices higher. Banks led FTSE 100 losses, while Asian markets were mixed, with Japan and Pacific markets helped by strong demand for AI-related chips.
September was a reminder that headline market numbers don't always tell the whole story. While some areas performed strongly, others faced a tougher backdrop.
Markets moving in different directions also highlighted the role diversification can play in spreading investment risk.
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