Investment market update: September 2025

There were ups and downs for investors during September 2025, with disappointing economic data dampening the market at times. However, some positive outcomes also emerged. Read on to find out what might have influenced your investment portfolio’s recent performance.

Please note: The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

Investors turn to gold as market uncertainty continues in September 2025

The price of gold reached a record high of $3,508.50 (£2,600) an ounce on 2 September (BBC 02.09.2025). Gold is often viewed as a “safe” asset, so the rising value could signal that investors are feeling nervous about the outlook for the equity market.

As gold prices rose, markets in the UK, Europe, and the US declined.

On 2 September, the FTSE 100 fell 0.43%. Among the biggest losers were retailers Marks & Spencer (-3.6%) and Sainsbury’s (-2.5%), and housebuilders Taylor Wimpey (-3.4%) and Barratt Redrow (-2.5%) (the Guardian 02.09.2025).

Similarly, key indices fell in Europe and the US, including Germany’s DAX (-1%), Spain’s IBEX (-0.9%), Italy’s FTSE MIB (-0.9%), and the US’s S&P 500 (-1.2%).

Shares in airlines tumbled on 4 September after Jet2 told investors it expected earnings this year to be on the lower end of forecasts. The announcement sent the company’s shares down 14% and had a knock-on effect on other airlines, including easyJet (-4.2%) and IAG (-2.3%) (the Guardian 04.09.2025).

Rising tensions between Russia and Europe led to defence company BAE Systems’ share price rising 2.9% on 11 September. The jump made the company the biggest riser on the FTSE 100, which gained 0.37% (the Guardian 11.09.2025).

On 11 September, hopes that the US Federal Reserve would cut interest rates lifted the major Wall Street indices, including the Dow Jones (0.5%) and S&P 500 (0.25%).

Then, on 24 September, after President Donald Trump said that Nato aircraft should shoot down Russian aircraft entering its airspace, European defence stocks jumped (the Guardian 24.09.2025). The two biggest risers on the FTSE 100 were Babcock International (1.9%) and BAE Systems (1.5%). Other companies whose share prices increased included France’s Thales (1.7%), Germany’s Rheinmetall (1.4%), and Italy’s Leonardo (2.8%).

After signs that the US trade war had eased in August, Trump unveiled new tariffs on 26 September.

From 1 October, medicines and pharmaceutical goods will face a 100% tariff when entering the US (Sky News 26.09.2025). Unsurprisingly, this caused shares in firms within this sector to fall, including AstraZeneca (-1.4%). The US will also impose tariffs of between 25% and 50% on other goods, including heavy-duty trucks and kitchen cabinets.

UK

Official data for July showed GDP was unchanged from the previous month (Yahoo! 12.09.2025).

The inflation rate for the 12 months to August was 3.8%, prompting the Bank of England to keep interest rates static (Office for National Statistics 17.09.2025)

UK borrowing costs reached a 27-year high in September due to higher interest rates on national debt (BBC 02.09.2025). The additional cost ate into the headroom available in the November Budget, placing pressure on the chancellor, who reportedly needs to plug a £50 billion gap in the public finances.

The effect of Trump’s trade war was also visible in the figures released in September. According to the Office for National Statistics, the trade deficit widened by £400 million to £10.3 billion in the three months to July 2025 (Office for National Statistics 12.09.2025).

Data from S&P Global’s Purchasing Managers’ Index (PMI), an economic indicator, painted a weak picture for the manufacturing sector (The Manufacturer 01.09.2025). The PMI reading was 47 in August (readings above 50 indicate growth). This was the 11th consecutive month the PMI remained below 50.

However, the PMI data wasn’t all negative. The service sector hit a 16-month high in August 2025 with a reading of 54.2 (Reuters 03.09.2025). Encouragingly, sales to the EU and US rose, which could suggest long-term growth.

Technology investors welcomed the news that US tech giant Nvidia pledged to invest £2 billion in UK firms, which could boost the sector (euronews 19.09.2025).