AI stocks retreat as market leadership broadens and UK stocks outperform

October monthly market review and most popular stocks & ETFs

Key points

• October saw tech damaged as AI-related names suffered a brutal pullback, but energy and staples rose

• The Nasdaq-100 suffered its worst month since June 2025 but UK shares rally

• Government bonds rallied across major economies as yields retreated from the September multi-year highs

• Last month was a stock lesson in diversification benefits

October’s headline losses for global equities concealed a stronger month for many stocks. Many if not most market leaders (tech/momentum/AI-linked) became laggards and the baton was picked up by some of the slower-moving sectors like staples and healthcare. Global equities fell 1.6% in US dollar terms, but the equal-weighted S&P 500 gained 5%, against a 0.9% decline for the headline index as 72% of stocks were risers last month. Investors questioned whether AI spending would deliver adequate returns, putting pressure on several heavyweight technology companies. Emerging markets fell 8%, with technology-heavy Asian markets particularly weak.

Sectors and stocks

Energy led developed-market sectors, rising 12.8%, followed by consumer staples and healthcare. Technology fell 7%, while communication services lost 13.5%. Among the largest-weighted stocks in the major indices Nvidia dropped 10.4%, Alphabet 18.7% and Meta 15.2%. Looking at the most traded stocks last month, Saxo UK clients were actively buying many of the beaten-up tech names.

It wasn’t all downhill for tech, Microsoft rose 1.8% (clients were net sellers), Apple rose 3.5% and Tesla climbed 12.7%. Amid the AI rout defensive names performed well, with healthcare a popular choice to hide out with Eli Lilly up 22.5%. Accenture, PTC, Hasbro, Equifax and Roper Technologies were the top five advancers on the S&P 500, while the worst five fallers were Intel (-45%), Reddit (-35.6%), SanDisk (-33.9%), Teradyne (-31.6%) and Seagate (-30.1%).

The UK was the top performer among the major equity markets. The FTSE All-Share gained 1.1%, benefiting from its energy and defensive exposure. The FTSE 100 rallied over 1% in October to notch its first monthly gain in three. The top gainers on the FTSE 100 were Experian, Imperial Brands, RELX, Sage Group and JD Sports Fashion, which all climbed around a fifth over the month. Leading decliners were IG Group, Fresnillo, Airtel Africa, Rolls-Royce and Lion Finance Group.

Government bonds rallied despite resilient economic activity and Brent crude reaching $118 a barrel amid Middle East tensions. The 10yr US Treasury yield tracks about 40bps lower at the start of November versus the start of October as the September rout in government bonds reversed amid the rout in AI stocks. France bucked the trend as fiscal and political concerns weighed on its debt. Gilts rallied as the Budget prompted a relatively muted market reaction, yields lower afterwards as the Chancellor stuck to the fiscal rules and offered little by way of surprise.

What clients traded

Nvidia topped the stock ranking, followed by Alphabet and SpaceX. Technology remained prominent across the list, spanning chips, cloud infrastructure and software.

Buy percentages varied considerably: Alphabet Class A recorded 77% as clients piled in on last week’s selloff, compared with 36% for Microsoft, 43% for Tesla and 39% for Palantir. Among UK names, Rolls-Royce was the most traded, with a 53% buy ratio; BP’s was 23% as clients took profits as shares hit their highest since the Deepwater Horizon disaster in 2010.

Vanguard’s accumulating S&P 500 ETF led the exchange-traded product ranking, with a 91% buy share. Broad equity trackers featured prominently, alongside semiconductor funds and physical gold.

Most traded single stocks in October

Most popular ETFs and ETCs in October

(iShares Physical Gold is an ETC and is included in this category alongside the ETFs.)