Global Equities Lose Momentum Amid Mixed Earnings
Global equity markets experienced a notable slowdown on October 21, 2025, as the rally that buoyed stocks earlier in the month hit resistance. While the S&P 500 managed a modest gain of 0.1%, the overall sentiment was cautious. Investors grappled with mixed corporate earnings reports and a lack of bullish conviction, as evidenced by the flat performance in the Nasdaq 100 and a general lack of direction in major indices. The recent rally appears driven more by short covering than by genuine optimism, with a basket of the most shorted stocks surging 14% year-to-date, far outpacing the S&P 500’s 1% gain.
Notable earnings beats and optimistic outlooks from General Electric, General Motors, and Coca-Cola provided some support. However, disappointing results and outlooks from companies like Netflix and Texas Instruments tempered enthusiasm, highlighting the uneven corporate profitability landscape. Alphabet’s gains, spurred by news of potential cloud computing deals with AI startup Anthropic, offered a rare bright spot.
Gold and Silver Experience Sharp Selloff
One of the most significant stories was the dramatic reversal in gold prices. Gold spot prices plummeted by over 5%, a move more than four times its typical daily fluctuation. Silver fell even more sharply, down by more than 7%. This selloff marked the worst single-day loss for gold mining stocks since March 2020, with the GDX ETF—tracking gold miners—hit particularly hard. Analysts attribute the decline to the unwinding of a momentum-driven rally, which had previously been supported by strong inflows into gold-related ETFs. The failed breakout in the ratio between gold miners and gold itself suggests that investors are now reassessing their positions in the sector, raising questions about the durability of recent gains.
Fixed Income Markets Respond to Inflation Surprises
Bond markets saw notable activity, particularly in the UK, where gilt yields dropped sharply following lower-than-expected September inflation data. UK headline CPI printed at 3.5% year-over-year, below both expectations and the Bank of England’s projections. This led to a rapid repricing in money markets, with the odds of a November rate cut jumping to 40% from under 13% the previous day. The pound weakened by 0.5% in response. Analysts now view the December Monetary Policy Committee meeting as a ‘live’ event, with a rate cut increasingly likely before year-end.
In the euro area, market-based measures of inflation continued to decline, reinforcing the cautious tone in European fixed income markets. Some analysts expect the European Central Bank may need to provide longer-term liquidity operations in 2026 to support stability.
US Credit Unions Expand Commercial Lending
In the United States, credit unions continued their push into commercial real estate (CRE) lending, moving away from their traditional consumer focus. As of Q2 2025, commercial loans accounted for 10.9% of total credit union lending, up from 7.7% in early 2020. Multifamily lending has seen significant growth, rising to $43.8 billion in Q2 2025 from $15.7 billion in Q1 2020. Nonowner-occupied CRE remains the largest segment at $81 billion. Mergers and acquisitions have helped credit unions scale rapidly, with many now exceeding the industry’s 11% commercial loan share.
Inflation Surprises in Canada and Argentina
Canada’s Consumer Price Index (CPI) surprised on the upside, signaling persistent inflationary pressures. This development could influence the Bank of Canada’s future policy decisions and adds to the global narrative of inflation uncertainty.
In Argentina, the peso weakened despite intervention efforts from the central bank and the US Treasury. The ongoing currency instability highlights the challenges facing emerging markets, where policy measures have yet to stem the tide of capital outflows and depreciation.
Investor Outlook: Cautious Amid Uncertainty
Across asset classes, investors are at an inflection point. The lack of clear direction in equities, the dramatic reversal in precious metals, and inflation surprises in major economies have all contributed to a cautious stance. Market participants are closely watching upcoming central bank decisions, especially the Federal Reserve’s rate announcement next week, as well as developments in US-China trade talks and the ongoing earnings season.
With volatility rising and sentiment shifting, the next few weeks will be critical in determining whether global markets regain momentum or enter a period of sustained uncertainty.