Stronger-than-expected U.S. growth has reset investors’ assumptions about dynamics, policy and asset allocation, propelling stocks to new highs while reinforcing selective risk in global markets. The third quarter grew at an annualized rate of 4.3% through September, significantly above the consensus of 3.2% and the fastest rate in 2 years. The composition was as important as the news, with consumer spending accelerating and easing fears that a slowdown in the labor market could translate into a sharp decline in household demand. The reassurance initially sparked hesitation as markets weighed the interest rate implications, but the session ultimately ended higher as investors judged that growth resilience still outweighed political risks.
US stocks reflected this recalibration. The rose 0.5% to a new record, its first since December 12, while the gained 0.2% and advanced it by 0.6%. The market response underscored the belief that the economy remains in a narrow window where growth is firm enough to support earnings without immediately imposing a restrictive policy response. Yields on longer-term Treasuries were little changed, indicating that bond markets are not yet challenging the idea that inflation is slowing even as activity accelerates. Expectations for 2026 multiples remain anchored, as does confidence that the Federal Reserve will avoid excessive tightening in a still-expanding economy.
At the same time, the data has reignited a parallel debate about political credibility and . Strong growth coupled with falling inflation has historically supported stocks, but concerns that aggressive easing could eventually push up long-term yields and weaken the currency have led to defensive hedging. extended its rally above $4,500 per troy ounce before closing just below that level at another record high, leaving prices to rise more than 70% in 2025. The move reflects not short-term inflationary fear but longer-term skepticism about monetary discipline if growth remains strong enough to warrant easing financial conditions.
Leadership on equity remained…
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