Summary - October 2025 market update

Global equity markets rose in October 2025, supported by easing U.S.–China trade tensions and interest rate cuts by the U.S. Federal Reserve, despite periods of volatility and geopolitical uncertainty. Technology stocks led gains, with strong momentum in artificial intelligence driving market optimism.

Canada’s economy continued to soften as trade tensions with the U.S. weighed on growth. Inflation edged higher, the labour market cooled, and job vacancies fell to their lowest level since 2017. Trade negotiations with the U.S. were halted late in the month after new tariffs were imposed, further pressuring exports and manufacturing. In response to slowing activity, the Bank of Canada cut its policy rate by 25 basis points to 2.25%, marking its second consecutive rate reduction to support consumers and businesses.

In the U.S., a government shutdown lasting the entire month delayed the release of key economic data and increased uncertainty, though U.S. equities still advanced. Meanwhile, U.S.–China trade relations improved modestly after both countries agreed to a one-year tariff truce, helping stabilize investor sentiment despite unresolved issues around technology and national security.

China’s economy grew in the third quarter but at a slower pace, constrained by weak domestic demand and a struggling property sector. Government stimulus measures and strong exports to non-U.S. markets helped offset these pressures, keeping China on track to meet its annual growth target.

Artificial intelligence remained a dominant market theme, highlighted by NVIDIA becoming the first company to reach a US$5 trillion valuation. Significant AI investments across the technology sector continued to fuel equity market gains, though concerns about a potential AI bubble persisted.

Overall, equities advanced, bond yields declined, gold prices reached record highs, and oil prices fell, reflecting a market environment balancing optimism around AI and rate cuts against ongoing trade risks and economic slowing.

To read the full update, including data tables and detailed commentary, visit the full article on Canada Life: Monthly Market Update – October 2025.