Shutdown Shadows. Shiny Earnings.
Join DWS' Chief Investment Officer Vincenzo Vedda and his team in this month’s Market Movers as they analyze the drivers behind recent events and discuss key trends that could shape the weeks ahead.
In October, investors had a lot to consider, especially since the U.S. government shutdown was on track to become the longest in history. This added to the already complex backdrop of uncertainty. Nevertheless, U.S. equities posted solid gains, bolstered by robust Q3 earnings and easing trade tensions between the U.S. and China. As of the end of the month, 30 of the 50 largest U.S. companies had reported, with 90% beating their expectations. The MSCI Emerging Markets gained for the tenth consecutive month in October as strong gains in AI-focused Asian tech stocks provided support. Gold extended its rally, briefly reaching an all-time high of nearly $4,380 before easing due to profit-taking.
Winners and losers of the month
Source: Bloomberg Finance L.P., DWS Investment as of 10/31/25 if not otherwise stated. Returns displayed in the performance chart refer to the period of 9/30/25-10/31/25. Index definitions: MSCI EM = MSCI Emerging Markets Index; Gold = XAU currency Index; Nasdaq = Nasdaq-100 Index; S&P 500 = S&P 500 Index; US IG = The Bloomberg US Credit Index; Bund 10Y = Bloomberg Series-E Germany Govt Bond Index; UST 10Y = Bloomberg Series-E US Govt Bond Index; EUR IG = IBOXX Euro Corporates Overall Total Return Index; Eurostoxx 50 = Eurostoxx 50 Index; USD = Bloomberg Dollar Index. Past performance is not a reliable indicator of future returns. Forecasts are based on assumptions, estimates, views and hypothetical models or analyses, which might prove inaccurate or incorrect.ource: Bloomberg Finance L.P., DWS Investment as of 10/31/25 if not otherwise stated. Returns displayed in the performance chart refer to the period of 9/30/25-10/31/25. Index definitions: MSCI EM = MSCI Emerging Markets Index; Gold = XAU currency Index; Nasdaq = Nasdaq-100 Index; S&P 500 = S&P 500 Index; US IG = The Bloomberg US Credit Index; Bund 10Y = Bloomberg Series-E Germany Govt Bond Index; UST 10Y = Bloomberg Series-E US Govt Bond Index; EUR IG = IBOXX Euro Corporates Overall Total Return Index; Eurostoxx 50 = Eurostoxx 50 Index; USD = Bloomberg Dollar Index. Past performance is not a reliable indicator of future returns. Forecasts are based on assumptions, estimates, views and hypothetical models or analyses, which might prove inaccurate or incorrect.
Anyone focusing solely on the month-on-month price changes of gold (+4%) and oil (–3%) might mistakenly conclude that October was geopolitically uneventful.
But intra-month volatility tells a different story: gold surged as much as 13% from the start of the month, nearly breaking the USD 4,400 per ounce barrier, before slipping below USD 4,000 and then stabilizing at about that level. Brent crude, on the other hand, moved in the opposite direction – falling from USD 68 to near USD 60 per barrel, then rebounding to USD 65. Equity markets across the globe meanwhile climbed to new record highs, interrupted only by a short-lived but severe setback.
These swings were mainly triggered by political developments. Donald Trump’s renewed threat on October 10 to impose 100% tariffs on Chinese imports shocked markets – maybe for the last time. They reacted sharply, with the S&P 500 dropping 2.7% in a single day, its biggest fall since April. But, as so often, the U.S. president quickly backpedaled and before his hastily arranged meeting with Chinese President Xi Jinping in South Korea at the end of the month it had become clear who held the upper hand.
In our monthly Investment Traffic Lights we analyze what this macro outlook means for the various asset classes and regions. Click ⬇️ below ⬇️ to read the full report.
Who would dare bet against a year-end rally? The stars seem nicely aligned: the AI train is still going strong, the reporting season has been benign so far, President Trump is successfully undoing some of the damage he did previously to trading relationships with Asia, and central banks are delivering – broadly – what was expected.
But of course, it is not all that rosy, as a couple of examples highlight. The Fed's decision-making is complicated by the lack of data it stresses it relies on as the U.S. government is still in shutdown at the beginning of November. This means that both inflation and jobs data is difficult to gather and to evaluate. Other problems too might derail the year-end rally. U.S. equity valuations are at record highs and so is the level of concentration of the U.S. stock market in a handful of (AI-leaning) companies with almost incestuous relationships. It is increasingly hard to tell whether one company is a customer, strategic partner, investor or competitor of another. They're all in it together, for better or worse. Private debt, too, has its risks, as some senior U.S. bankers pointing out.
In our monthly Investment Traffic Lights we analyze what this macro outlook means for the various asset classes and regions. Click ⬇️ below ⬇️ to read the full report.
It has been a year of major shifts. In Donald Trump’s second term as U.S. President he has turned his back on the globalization that helped deliver global economic growth in the past four decades – and the global economic consequences are pervasive, complex and still highly uncertain. But Trump has also shifted in another important way. His reluctance to commit fully to supporting NATO has provoked a big rethink in Europe’s capitals. Vladimir Putin’s aggression is blatant and Europe now realizes the U.S. is not a defender that can be relied on. European governments are steadily committing more to defense spending. As the 6th of our 10 Themes for 2026 explores, the impact has already been felt in defense sector stocks: The Bloomberg Europe Defense Index has seen a more than 500% increase in the past five years. We expect that the structural supporting factors could persist, but careful selection remains key. The nature of conflict and the technology involved in it is changing fast; so too are many of the involved companies.
Click ⬇️ below ⬇️ to read the theme on Europe Defense.
The profound source of another big shift is more like a tectonic plate moving beneath the world’s societies. People are having fewer children; year by year the population is aging. The consequences for economies and for pension systems are major. In Germany, for example, six contributors shared the cost of one pensioner's pension in 1962.[1] Today the figure is just over two – and it is likely to continue to fall as more old people need to be looked after by the workforce.
The 5th of our 10 Themes argues that a different way of saving for pensions could help. Germans are inclined to save, but much of their savings, as Martin Moryson, our Head of Economics, points out, are in savings accounts that tend to deliver returns that might be sub-optimal.[2] However, in the forty years from 1983 similar sums invested in the Dax would have yielded an average annual return of over 8%.
Click ⬇️ below ⬇️ to read the theme on changes in demographics.
Another of our 10 Themes examines a marked financial change that is already in progress: the rise of stablecoins. With the introduction of the Markets in Crypto-Assets Regulation, the EU has established a transparent legal framework intended to foster confidence among institutional investors and retail customers alike. The EURAU euro stablecoin, for instance, is regulated, backed theoretically one-to-one by euros and subject to supervision by the German financial regulator. This aims to offers investors greater transparency and reduce regulatory risks, as well as providing an alternative to other unregulated stablecoins. Nevertheless risks, such as ample liquidity, remain. The use cases for stablecoins remain limited at present but their speed and cost-effectiveness may give them the potential to play a major role in the years ahead.
Click ⬇️ below ⬇️ to read the theme on Stablecoins.
[1] Statistisches Bundesamt (German Statistics Office) as of October 2025
[2] See, for example, European Economic Review, “Public pension reforms: Financial and political sustainability,” Volume 175, as of 2025
Sources: Bloomberg Finance L.P., DWS Investment as of 10/31/25 if not otherwise stated. Returns displayed in the performance chart refer to the period of 09/30/25-10/31/25.
Any mentions of specific securities are for illustrative purposes only and should not be considered a recommendation. Past performance is not a guarantee of future results. The opinions and forecasts expressed are those of the authors and may not come to pass. Forecasts are based on assumptions, estimates, views and hypothetical models or analyses, which might prove inaccurate or incorrect. Forecasts are not a reliable indicator of future returns. All investments involve risks, including potential loss of principal. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index. Companies involved in artificial intelligence and big data face intense competition, may have limited product lines, markets, financial resources, and personnel. Artificial intelligence and big data companies are also subject to risks of new technologies and are heavily dependent on patents and intellectual property rights and the products of these companies may face obsolescence due to rapid technological developments. Cryptocurrencies and blockchain (the technology that supports crypto) have distinct risks that can include: the physical custody of cryptocurrency, (theft, loss or destruction of key(s) to access the blockchain), lack of regulation, cybersecurity incidents, new and untested technology and its reliance on the Internet.
DWS Glossary
A stablecoin is a digital token that is pegged to an asset, like a national currency or gold.
The Bloomberg Barclays U.S. Aggregate Credit Index measures the investment grade, U.S. dollar-denominated, fixed-rate, taxable corporate and government-related bond markets.
Bunds is a commonly used term for bonds issued by the German federal government with a maturity of 10 years.
The Euro Stoxx 50 is an index that tracks the performance of blue-chip stocks in the Eurozone.
High-yield bonds are issued by below-investment-grade-rated issuers and usually offer a relatively high yield.
The iBoxx Euro Corporate Index includes euro-denominated corporate bonds issued by investment-grade-rated entities.
Investment grade (IG) refers to a credit rating from a rating agency that indicates that a bond has a relatively low risk of default.
The MSCI Emerging Markets Index captures large- and mid-cap representation across 23 emerging-market countries.
The Nasdaq-100 is an equity index which contains the 100 biggest common stocks listed on the Nasdaq Stock Market.
The S&P 500 is an index that includes 500 leading U.S. companies capturing approximately 80% coverage of available U.S. market capitalization.
The Trade-Weighted U.S. Dollar Index tracks the performance of the U.S. dollar relative to other world currencies.
Treasuries are fixed-interest U.S. government debt securities with different maturities: Treasury bills (1 year maximum), Treasury notes (2 to 10 years), Treasury bonds (20 to 30 years) and Treasury Inflation Protected Securities (TIPS) (5, 10 and 30 years).
as of 10/31/25 102938_16 (11/2025), 102939_16 (11/2025)