Key Takeaways

• U.S. Q2 GDP growth revised to a 3.8% annual rate, indicating stronger-than-expected expansion.
• Core PCE inflation holds steady at 2.9% for August, highlighting persistent but controlled price growth.
• Bank of Japan signals a potential rate hike, prompting shifts in global bond markets and renewed focus on cross-market impacts.
• Wall Street stocks edge lower amid mixed economic signals, as investors recalibrate expectations.
• A broad financial markets review suggests continued adjustment to U.S. economic resilience and international monetary policy shifts.

Introduction

On 30 September 2025, the financial markets review is led by the U.S. second-quarter GDP growth revision to an annual rate of 3.8%. This reflects stronger-than-expected economic momentum in a changing global context. Steady August inflation and the Bank of Japan’s signal of a possible rate hike further highlight the shifting environment for tech-focused investment decisions.

Top Story

The U.S. Commerce Department has revised its second-quarter GDP growth estimate upward to 3.8%, compared to the initial 3.2% figure. This increase was driven by strong consumer spending and business investment, challenging earlier expectations of an economic slowdown.

Corporate earnings remained robust in the technology sector, with enterprise software spending rising by 12% year-over-year. The revision also noted substantial export growth, suggesting improved global demand for U.S. products.

Economists at leading investment banks have begun updating their 2026 forecasts in response to the new data. Goldman Sachs, for example, raised its full-year growth projection to 2.9% from 2.4%, citing resilient consumer activity and easing inflation pressures.

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Inflation Trends

Euro Area Price Pressures Ease

Consumer prices in the eurozone increased by 2.8% in September, the slowest pace in 18 months. Core inflation, which excludes volatile food and energy costs, declined to 2.5% from 2.9% in August.

Bank of Japan Policy Shift

The Bank of Japan announced plans to gradually adjust its yield curve control policy. This signals a potential end to its ultra-loose monetary approach. Governor Ueda stated that the central bank would consider broader policy normalization if wage growth remains sustainable.

Market Wrap

Wall Street indices reached new highs following the U.S. GDP revision. The S&P 500 rose by 1.2% and the Nasdaq Composite advanced by 1.7%. Technology stocks led the gains, particularly among semiconductor manufacturers and cloud computing providers.

Global bond markets responded to the economic data, with Treasury yields increasing across the yield curve. The benchmark 10-year yield rose by 8 basis points to 4.15%, and German bunds experienced similar movements.

The dollar appreciated against major currencies, as the DXY index gained 0.5%. The euro fell below 1.08, and the yen weakened past 148 following the Bank of Japan’s policy announcement.

For traders and investors seeking to anchor their approaches during periods of shifting momentum and volatility, exploring frameworks like discipline habits can help maintain consistency and adaptability.

What to Watch

• Federal Reserve policy meeting and press conference on 15 October 2025
• Bank of Japan monetary policy decision on 17 October 2025
• U.S. Consumer Price Index release for September on 22 October 2025
• European Central Bank rate decision on 24 October 2025

As uncertainty rises around central bank decisions, it can be beneficial to develop your understanding of pullback timing as part of your technical strategy.

Conclusion

A stronger-than-expected U.S. GDP revision is central to today’s financial markets review. It underscores resilient consumer spending and evolving global inflation dynamics. The Bank of Japan’s policy signal has further shaped recent moves in bond and currency markets. What to watch: Upcoming central bank meetings and economic data releases in October are likely to influence market forecasts and sentiment.

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