October review: A promising beginning

Horacio Coutino, multi-asset strategist

“When something is simple and intuitively compelling, it's almost impossible to disabuse people of it, no matter how false it is empirically. And nothing is more intuitive than Fed cuts rates.”
— Mark Dow, founder of Dow Global Advisors, in a conversation with Street Signals, on 6th October, 2025.

Fed Chair Jerome Powell’s speech in Jacksonville, Florida at the end of August, shifted investors’ sentiment, leading to higher valuations for US equities and heightened expectations for lower interest rates this year. The US equities rally has been uneven, with some sectors having lowered their earnings guidance due to the ongoing US tariffs saga. The deteriorating outlook for job growth has only reinforced expectations of lower interest rates, contributing to the inevitability of elevated valuations in the short term, despite potential long-term effects.

Despite ongoing concerns about regional banks and, perhaps more notably, the elevated expectations leading into the quarter, the Q3 earnings season has commenced on a positive note. The proportion of companies surpassing consensus estimates exceeds historical norms, signaling a strong start to the reporting period.

This report will analyse:

• S&P500 earnings grow than destimates for Q3
• Expectations for sectoral earnings growth rates andnet profit margins
• Sector-specific monthly performance for US andEuropean equities

Download the report