Soft Landing, Smart Machines: How Policy Shifts Are Powering Stock Markets' Momentum

Ahmad Mortazavi
Nov 1, 2025
4 min read

🌍Big Picture

Global markets ended October on a firm footing as central banks shifted from tightening to stabilisation mode. The Federal Reserve cut interest rates by 25 basis points to a 3.75 %–4.00 % range; its second reduction of 2025 acknowledging that inflation is cooling and the economy remains resilient. Chair Powell tempered expectations of another cut in December, yet the policy tone was enough to reignite risk appetite.

The European Central Bank, meanwhile, left its deposit rate unchanged at 2 %, describing monetary policy as being “in a good place”. Yields fell sharply across global bond markets; the U.S. 10-year Treasury slipped below 4.1 %, and the German Bund followed with its biggest monthly rally since 2023.

Equities celebrated the return of easier financial conditions. The S&P 500 and Nasdaq Composite posted their sixth and seventh consecutive monthly gains, respectively, fuelled by robust technology earnings. Amazon surged more than 10% on record cloud-division growth, and Nvidia crossed the US $5 trillion valuation mark a milestone underscoring how the AI revolution continues to drive market momentum.

In Asia, optimism surrounding a U.S.–China trade truce sent regional indices to multi-year highs. Japan’s Nikkei 225 briefly topped 51,000, its best run in decades. Easing inflation and dovish policy expectations created a virtuous circle of lower yields, cheaper funding, and stronger equity sentiment.

Commodities told a more nuanced story. Gold reached a new record near US $4,381/oz mid-month before retreating to around US $4,000, reflecting investors rotating from safe havens to equities. Oil remained subdued; Brent around US $65/barrel — as supply stability and OPEC+ output flexibility countered geopolitical risk.

Overall, October capped a month of controlled optimism: growth remains moderate, inflation is fading, and the world’s largest economies are now entering a phase of policy balance rather than constraint. Investors are gradually positioning for a soft-landing scenario, but selective exposure and risk discipline remain crucial.

📊 Assets at a Glance

Equities:

Equity markets continued to rally, but leadership remains narrow. U.S. technology mega caps dominate performance, masking pockets of consolidation across smaller sectors. European stocks advanced quietly, benefiting from falling yields and reduced energy costs. Asia led globally, helped by stimulus expectations in China and Japan’s policy continuity. Emerging-market equities attracted strong inflows for a third straight week, supported by weaker U.S. dollar dynamics and improving trade sentiment.

Fixed Income:

Bond markets enjoyed a powerful rally. The U.S. 10-year yield at ~4.08 % marked a six-month low, while long-dated U.K. gilts and eurozone debt recorded their best month since 2023. The shift from “higher for longer” to “policy pause” is easing financial conditions and breathing life back into credit markets. However, spreads are now tight, suggesting limited compensation for risk if growth falters. Investors are extending duration selectively while remaining wary of liquidity shocks.

Commodities:

Gold’s dramatic mid-month surge to all-time highs underscored lingering demand for inflation protection. Its subsequent pull-back below US $4,000 reflects improving confidence in a soft-landing narrative. Oil prices stayed range-bound as the market balanced fresh sanctions on Russia with Saudi indications of higher output. Agricultural commodities rose modestly after China agreed to resume large U.S. farm purchases; a small but symbolic step towards trade normalisation.

Currencies:

The U.S. dollar softened early in the week before recovering after the Fed meeting, ending near DXY 99. The euro hovered around US $1.15, and the yen, despite brief firmness, remains near multi-decade lows around ¥154 per USD. The macro backdrop, lower rates and calmer geopolitics continues to favour emerging-market and commodity-linked currencies.

Crypto:

In digital assets, the SEC’s approval of new altcoin ETFs (Litecoin, Hedera, Solana) highlighted how crypto’s integration into mainstream finance is accelerating, even as volatility persists.

📅 Key Events Next Week

Mon 3 Nov — U.S. Treasury Quarterly Refunding

Scenario 1: Longer-maturity issuance lifts yields and pressures duration trades.
Scenario 2: Front-loaded issuance eases the curve and supports equities.

Tue 4 Nov — Reserve Bank of Australia Decision & U.S. JOLTS Report

Dovish RBA: Aussie yields fall; AUD softens; EM risk assets gain.
Hawkish RBA: AUD strengthens; Asia equities pause. Weak JOLTS: Confirms labour cooling, supporting bonds. Hot JOLTS: Reduces odds of a December Fed cut.

Wed 5 Nov — ISM Services & Fed Beige Book

Below 50: Signals slowdown; yields fall; defensive rotation.
Above 52: Reassures on growth; risk assets outperform.

Thu 6 Nov — Bank of England MPC Meeting

Dovish hold/cut: Gilts rally, GBP eases, domestic equities lift.
Hawkish hold: Sterling firmer; front-end yields rise.

Fri 7 Nov — U.S. Nonfarm Payrolls (Oct)

Soft jobs & tame wages: Confirms soft landing; global rally resumes.
Strong print: Yields jump; tech under pressure.

💡 Investment Idea: Siemens AG: SIE

Amid renewed interest in industrial innovation, Siemens AG offers a compelling bridge between Europe’s traditional engineering excellence and the digital future.

Why now: As monetary tightening gives way to stability, investors are revisiting industrials poised to benefit from structural trends including automation, AI, and the energy transition. Siemens’ partnership with NVIDIA to integrate Omniverse into its Xcelerator platform is redefining factory automation, enabling real-time digital twins that cut costs and accelerate design.

Growth pillars

Digital Industries: Despite a cyclical slowdown, margins remain robust at 15 – 19 %, supported by strong software demand.
Smart Infrastructure: Growing at 6 – 9 % annually with margins near 18 %, driven by electrification, grid upgrades, and data-centre investment.
Mobility & Rail: Order book strength ensures revenue visibility even amid economic softness.

Valuation & returns: Trading around 15 – 17× forward earnings with a ~2.2 % dividend yield, Siemens offers a rare mix of quality, innovation, and income. The company’s balance sheet is solid, free cash flow high, and exposure global from Europe’s energy transition to Asia’s manufacturing modernisation.

Risks: Short-term headwinds in factory automation, euro strength, and China’s property-linked demand could affect momentum. Yet the medium-term case; digitised industry, electrified transport, and AI-enabled efficiency remains powerful.

Takeaway: For investors seeking exposure to Europe’s industrial renaissance without chasing U.S. valuations, Siemens AG stands out as a premier play on the AI-driven transformation of manufacturing and infrastructure.

Risk Disclaimer

The information provided in this analysis is for informational purposes only and should not be considered financial advice. Financial markets involve substantial risk, and investments can fluctuate in value, leading to potential losses. Past performance is not indicative of future results. Before making any investment decisions, readers should consider their own risk tolerance and financial situation. The strategies and opinions expressed are based on current market conditions and may change without notice.