Unstoppable Force Meets Immovable Object: Media Scares, But Market Prevails

Despite the seemingly endless tariff turmoil, the U.S. stock market continues to show strength, with the S&P 500 and Nasdaq reaching new all-time highs in recent days. 

This rally is supported by strong earnings reports from major tech companies like Meta, Alphabet, and Nvidia, which continue to beat expectations.  

Investors remain optimistic largely due to the expectation that the Fed will cut interest rates soon, which usually encourages more buying in stocks.  

However, the market is concentrated, with a few large tech companies accounting for much of the gains – so diversification remains important for stability.  

Meanwhile, in the UK, the FTSE 100 has risen steadily, supported by better-than-expected UK economic data, such as solid GDP growth and steady employment numbers.  

Challenges remain in certain sectors, including mining and energy, which have seen some downward pressure recently.  

But overall, investor sentiment is positively influenced by a supportive Bank of England and hopes for rate cuts in the U.S. 

European markets also performed nicely, with indexes like the STOXX 600 and DAX showing gains on the back of improving business sentiment and steady economic activity.  

Investors are cautiously optimistic as they await further signals from the European Central Bank on monetary policy.  

Even with trade worries still in the background, many companies are showing good results. 

This is a reminder that spreading out investments helps, and staying invested through ups and downs can pay off in the long term. 

Missing a few best days can make a huge impact on total returns in the long run.

Recent U.S. economic data shows the economy is slowing down but is not yet in a recession. 

New inflation numbers show that price increases remain under control, with annual inflation running at 2.7%. And U.S. retail sales are steady, supporting the outlook that American consumers are still spending. 

This gives the Federal Reserve more room to possibly cut interest rates next month. Many analysts think it will do this soon to help keep the economy strong.  

When the Fed lowers rates, bond prices usually rise – especially for shorter- and medium-term bonds – because newer bonds will pay less interest.  

This week, demand grew for U.S. government bonds (called Treasuries), pushing their yields (the interest paid by bonds) down slightly. For example, the two-year Treasury yield moved to around 3.73%. 

Inflation worries and tariff impacts from trade tensions caused some bond market volatility but haven’t stopped the overall bond rally.  

Investors are watching the shape of the yield curve (difference between short- and long-term bond yields) closely, as it steepened recently, signalling expectations of rate cuts ahead. 

Meanwhile, UK GDP (a measure of economic growth) rose 0.3% last quarter, which is better than expected but still lower than earlier in the year.  

The UK job market showed unemployment at 4.7%, with wage growth staying strong but not rising as quickly as before.  

The British pound got stronger after these data releases, and business investment remains healthy.  

UK government bonds (gilts) have performed well in recent weeks, helped by this steady economic data.  

The BoE’s recent rate cut to 4% supports gilts’ prices since lower interest rates make existing bonds more valuable.  

Investors are cautiously optimistic but remain watchful for inflation trends and future BoE decisions.  

UK bonds offer safety when stock markets face volatility and are an attractive option for conservative investors.  

European government bonds stayed steady as the European Central Bank (ECB) remains cautious and has not changed interest rates recently.  

Bonds from southern European countries like Italy and Spain have gained a bit more than others, as investors seek yield and perceive lower tightening risk.  

Inflation data across the Eurozone is improving slowly, but rate cuts are not expected imminently.  

The euro remains stable, helping keep bond market conditions calm.

This week’s events are a good reminder of why it’s important not to get caught up in day-to-day headlines or market rumours. 

Instead, keeping a long-term plan in place and staying diversified – owning a healthy mix of stocks, bonds, and other investments – can help smooth the ride through short-term ups and downs. 

At Hoxton Wealth, we work closely with our clients to help ensure their portfolios are built with this resilience in mind. 

Our investment approach is designed to match your goals, risk tolerance, and time horizon, so that temporary market noise doesn’t distract from your long-term success.  

We also monitor economic developments and company earnings for you, adjusting strategies when needed, so you don’t have to react to every headline. 

Company earnings trends and steady policy decisions are encouraging signs for patient investors. Those who try to jump in and out of the market when the news cycle is loud often miss out on some of the best opportunities. 

Our client services team is always here to help – whether you have questions about your current portfolio, want to review your long-term plan, or simply need reassurance during uncertain times. 

You can reach them by email at client.services@hoxtonwealth.com or via our global WhatsApp number: +44 7384 100200. 

Remember: Focus on your goals, not the noise and let us help you stay on track.