Welcome back to our weekly market roundup, your quick look at what’s been moving the markets and what it means for investors.
It’s been another good week for investors, with several major indices reaching new highs. The S&P 500 hit an all-time record for sterling investors, joined by the FTSE 100 and emerging markets. The Euro Stoxx didn’t quite manage a new high this week, but it did so last week – keeping European markets firmly in positive territory.
The headline? It’s been good news across the board for global markets.
What’s driving the US rally?
Over in the US, the same forces continue to power the market higher. Optimism around artificial intelligence (AI), expectations of strong corporate earnings, and hopes for further interest rate cuts from the Federal Reserve have kept investor sentiment buoyant.
These themes have dominated much of 2025 so far, but this week, something interesting has been happening beyond the US.
Why investors are looking beyond America
As the AI-driven surge has made the US market increasingly expensive and concentrated, investors are now looking elsewhere for better value opportunities.
In relative terms, most markets outside the US appear cheaper, and this valuation gap has been attracting attention. As a result, global equity strength this week hasn’t been just an “AI story” – it’s also been about diversification and valuation.
Regional standouts
Different regions have their own reasons for performing well:
- United Kingdom: The FTSE 100 has been lifted by the banking sector, helped by a slower pace of interest rate cuts from the Bank of England. Gold miners have also surged, supported by the gold price hitting a new record above $4,000 an ounce.
- Europe: The European Central Bank’s faster rate-cutting cycle has boosted sentiment, alongside strong fiscal support from governments.
- Emerging markets: A weaker US dollar has provided tailwinds. Many emerging market governments and companies borrow in dollars but earn in local currencies, so when the dollar falls, their debt payments become cheaper.
Record highs across the globe
It’s rare to see so many major markets breaking records at the same time, but that’s exactly what’s happening. From London to New York to Shanghai, equity markets are being lifted by a mix of AI optimism, policy support, and improved valuations.
Still, as US companies kick off another earnings season, it’s worth noting that this optimism will soon be tested. If earnings results fall short of expectations, markets may face renewed pressure in the weeks ahead.
In summary
It’s been a broadly positive week for investors, with global equities hitting record levels on multiple fronts. The rally is no longer limited to the US or the tech sector – it’s a global story built on different local strengths.
But, with earnings season now underway, the next test will be whether company results can keep pace with the optimism that’s driven markets so far.
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