State Street Global Markets released its latest institutional investor indicators. The risk appetite indicator remained positive in September, maintaining optimistic sentiment for five consecutive months. Last month's reading matched the 2025 high reached in July, reflecting investors' continued pursuit of risk assets.

State Street Global noted that despite the steepening of global yield curves, long-term investors' asset allocation across equities, fixed income, and cash remained essentially unchanged through the end of September. This indicates that funds have not yet returned to long-duration bonds, with fixed income holdings remaining significantly below long-term average levels. This trend aligns with overall market sentiment indicators, showing institutional investors continued to increase holdings in high-risk assets during September.

Lee Ferridge, Head of Americas Macro Strategy at State Street Markets, commented that despite multiple major economies facing heightened geopolitical uncertainties, mixed economic data, and growing valuation concerns across various risk asset classes, the overall risk appetite indicator demonstrated strong resilience in September. Equity markets continued reaching new highs while volatility indicators remained subdued.

The Federal Reserve initiated its first rate cut of the year in September and signaled two additional cuts before the end of 2025 (one more than projected in June), significantly boosting market confidence.