Global Stocks Shine in 2025: What's Driving the Rally?

In 2025, global markets have been on a roll, with foreign stocks taking the lead. Developed markets outside the US have seen the biggest gains, up 26. 4% so far this year. Emerging markets aren't far behind, with a nearly 23% increase. Even US stocks have done well, rising 13. 6%. But it's not just stocks that are doing well. Offshore property investments have also outperformed the Global Market Index (GMI), a benchmark that tracks all major asset classes. The only laggard this year has been US real estate investment trusts, with a modest 5. 2% return. Looking ahead to the fourth quarter, things get a bit more complicated. The US government is facing a potential shutdown, and there's uncertainty around tariffs and inflation. The Federal Reserve has been cutting interest rates, but inflation has been rising. The personal consumption expenditures price index hit 2. 7% in August, the highest since April 2024. Markets are currently betting that any inflation pickup will be mild and brief. But if Treasury yields continue to rise, it could signal that the bond market is worried about inflation. It's a lot to keep an eye on, but for now, the global rally continues.