The rebound was supported by “resilient Q3 earnings” and “AI tailwinds,” which “boosted them to the highs.” 

Bonds were largely flat as “yields recovered from the lows post a hawkish FOMC,” while gold remained higher on the month and oil was “volatile on Russian sanction news but was still down.”Bitcoin finished October as “the biggest underperformer.”

The regional breakdown showed emerging markets outperforming developed markets, aided by a “strong rally in Korean equities.” Within developed markets, Japan led gains on “the surprise choice of Takaichi as PM,” which weakened the yen and “drove equities higher.” 

Europe followed closely behind, buoyed by improved sentiment and fund flows. Barclays said, “Equity inflows picked up in October,” with “Europe [seeing] improved demand with US investors turning net buyers of the region.”

Sector performance reflected the ongoing dominance of technology. Barclays wrote that “Global sector leadership was led by the Tech complex,” supported by “AI/Big Tech capex and earnings momentum.” 

Utilities and healthcare also advanced, the latter “helped by easing FX headwinds and drug pricing concerns” in European pharmaceutical companies. Financials saw profit-taking “despite strong results,” while energy and commodities “lagged mainly because of US names underperforming.”

Factor trends diverged between the two major markets. In the U.S., “Growth/Quality keeps outperforming,” aided by easier financial conditions and artificial intelligence optimism.

In contrast, “Value continues to outperform” in Europe, though Barclays noted that “Growth/Quality performance picked up in October.” Small-cap stocks underperformed, “mainly in the US on credit concerns,” while “Low vol lagged amid risk-on markets.”

Barclays described October as a period of renewed momentum for European markets, where solid earnings and external inflows helped offset macro headwinds. 

“Global equities made new highs despite renewed tariff/geopolitical noise and US credit quality concerns pushing up x-asset vol,” Barclays said.