Global stocks tumbled in October, pressured by rising U.S. interest rates, worsening global trade relations and investor concerns about lofty valuations among technology and consumer tech companies. The powerful sell-off was initially triggered by surging Treasury bond yields, which were boosted by signs of stronger-than-expected U.S. economic activity.
Previously high-flying stocks led the market downturn, including Amazon and Microsoft. Traditionally defensive sectors such as utilities and consumer staples fared relatively better. Emerging markets stocks also declined broadly – with the notable exception of Brazil, where assets rallied on the election of market-friendly President Jair Bolsonaro.
Equity Index Returns (%)
October 2018
YTD 2018
U.S.
dollar
Local
currency
U.S.
dollar
Local
currency
S&P 500
-6.8
-6.8
3.0
3.0
MSCI ACWI
-7.5
-6.9
-4.0
-1.8
MSCI ACWI ex USA
–8.1
–6.8
–11.0
–6.6
MSCI World
-7.3
-6.8
-2.3
-0.6
MSCI Emerging Markets IMI
–8.9
–7.9
–16.4
–11.0
MSCI EAFE
–8.0
–6.5
–9.3
–5.2
MSCI Europe
–7.6
–5.4
–9.9
-4.7
MSCI Pacific
–8.6
–8.5
–8.4
–6.4
Source: RIMES