Financial Markets Q3 2025: Technology sector led the markets

Strong development in the stock market – technology at the forefront

During the third quarter, the technology and artificial intelligence sector continued its rapid growth, , a major trend that has persisted for some time. Large US companies, the so-called Magnificent Seven, accounted for a significant portion of the overall market's return. Several companies exceeded earnings expectations, which increased confidence in the sector's growth.

At the same time, small companies also performed well as investors sought diversification from a market dominated by large companies.

Global markets also saw a fairly positive quarter overall, including in many European and Asian countries.

The FED cut interest rates, the ECB held steady

The US Federal Reserve cut interest rates for the first time since December 2024 in Q3. This provided a tailwind for the stock market and provided grounds for a rise. Further interest rate cuts of 0.50 % are expected in Q4. However, a cause for concern for interest rate cuts may be inflation in the US, which has started to rise slightly from the lows of spring 2025.

Another important consideration regarding interest rate cuts is the US labor market. The labor market has long remained strong, but the latest figures have shown more pronounced weakness. However, uncertainty in the employment data is introduced by the US government shutdown. The latest unemployment claims figures have not been obtained for this reason, which could introduce uncertainty into the market if the shutdown lasts longer.

The European Central Bank kept its key interest rates unchanged at 2.15% during Q3. The last rate cut was in June 2025, after which the ECB has kept interest rates unchanged. Inflation in Europe is clearly lower than in the United States.

Oil and gold in opposite directions

Commodity markets saw a sharp divergence across underlying assets, with oil prices remaining under pressure due to rising production expectations and weaker demand forecasts.

Meanwhile, gold and silver have been on a strong rise as investors have sought a safe haven amid political uncertainty and expectationsof lower interest rate expectations.

Political uncertainty

Although the economic data has not weakened significantly overall despite the tariffs, the tariff policy imposed by US President Donald Trump has brought uncertainty to the markets. However, the effects may be reflected far into the future, which may cause uncertainty for investors. The transfer of capital to known safe havens, such as gold and silver, is already one sign of this.

European markets have also been nervous, particularly due to the political situation in France. Government instability and budget disputes have caused uncertainty among investors.

Corporate results surprised positively

Analysts' expectations for the third quarter results were cautious, but many companies' reports exceeded these expectations. Technology companies in particular can be singled out as a second boost. These positive results have increased confidence that companies' profitability can withstand a potential slowdown in growth.

Investors' concern: concentrated market

Despite the good performance in Q3, it is important to remember that the majority of the gains came from a small number of large companies, raising questions about the market's vulnerability if the largest companies' prices turn downward.

Summary: strong quarter, but risks remain

In summary, Q3 2025 was favorable for investors, but risks have not disappeared from the markets. Central bank decisions, political tensions and market concentration continue to maintain uncertainty. Investors' attention will now shift to whether the strong momentum continues into the rest of the year or whether we will see a correction.

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Indicators shown on the graphs:

Simple moving average, 200