Global equities continued their ascend in September, rising 1.1% for the month, finishing the third quarter 2.3% higher, and reaching almost 17% year-to-date gain, as measured by the performance of the MSCI All-Country World Index in EUR. The really astonishing feature was their resilience: markets reached several record highs during the quarter even as renewed Middle East tensions pushed Brent crude above USD 100 per barrel and more than 80% of developed-market central banks raised interest rates. Oil surged 9.3% in September and an exceptional 35.6% over the quarter. Yet, while bond markets struggled with rising yields, equity investors remained focused on strong earnings and continued investment in artificial intelligence (AI).The United States remained an important engine of the quarterly advance, with the S&P500 reaching fresh highs over the summer. Beneath the headline performance, however, the AI trade changed direction: July’s semiconductor sell-off gave way to a rotation toward major cloud-platform providers and software companies. September’s gains were particularly narrow – Information technology and Communication services were the only global sectors to finish higher for the month. An unusual contrast also emerged in valuations: upward revisions to earnings estimates meant that profits generally grew faster than share prices, allowing valuation multiples to decline even as equities advanced. Europe faced a particularly uncomfortable combination of expensive energy and tighter monetary policy. European natural gas traded above EUR 70 per megawatt-hour for most of September, renewing concerns about inflation and business costs. Nevertheless, economic activity proved more resilient than the energy shock might suggest: September’s preliminary composite purchasing managers’ (PMI) index reached its highest level since early 2023 in the Euro area, while the corresponding US indicator reached its strongest level since mid-2021. Across global sectors, Energy was the quarter’s clear winner, delivering more than twice the return of the next-best sector. Materials, by contrast, reversed sharply in September as rising bond yields weighed on precious metals following August’s rally. Outside the US and Europe, stocks saw  sharp reversals. Emerging-market equities fell 0.6% in September and 0.4% over the quarter, with South Korea moving from a first-half leader to the weakest emerging market in Q3 as semiconductor shares corrected. India endured its longest weekly equity losing streak in more than six years, pressured by expensive energy and higher interest-rate expectations. Meanwhile, smaller markets – including Greece, Colombia and Poland – delivered double-digit quarterly returns. Japan also stood out: the equity index TOPIX returned 3.8% in yen terms over the quarter, supported by strong earnings and financial stocks, even as the Bank of Japan lifted its policy rate to its highest level since 1995. Global bonds declined in Q3 as persistent inflation and tighter monetary policy pushed yields higher (bond yields and bond prices move in opposite directions). In September, the US Federal Reserve (Fed) and the European Central Bank (ECB) each raised rates by 25 basis points, while the US 10-year Treasury yield surged 54 basis points to 5.29% and the 30-year reached 5.64% at month-end. Heavy AI-related borrowing added to competition for capital and the yields upward pressure. In Europe, fiscal concerns compounded the sell-off, with France’s 10-year borrowing premium over Germany reaching approximately 94 basis points on 10 September, its widest since 2012. Overall, September and Q3 highlighted a notable divide: equity markets continued to find support in corporate profitability despite an increasingly hostile interest-rate and geopolitical backdrop. 
     U.S. equities ended September with only a modest decline, but the headline concealed much sharper losses across the wider market. The flagship S&P500 slipped 0.4%, while the technology-heavy Nasdaq Composite gained 1.9%. In contrast, the Dow Jones Industrial Average fell 4.1% and small-cap stocks lost 5.3%. The quarterly picture was similarly uneven: the S&P500 advanced 2.3% and the Nasdaq gained 2.6%, yet the Russell 2000 small-cap index dropped 7.2% (all returns in USD). The most notable feature was the market’s renewed dependence on its largest companies. The equal-weighted S&P500 – which gives each constituent the same influence – declined 4.8% in September and 1.9% over the quarter, sharply underperforming the conventional index. Thus, a positive quarter for the main benchmark masked considerably weaker performance beyond the dominant mega-cap names. Artificial intelligence remained the most powerful, yet volatile market theme. AI-related shares initially sold off following calls to slow development so that safety research could catch up. However, the reaction proved short-lived: investors returned to the sector’s commercial potential and strong demand outlook, driving a sharp recovery later in the month. Sector-wise, Energy was the quarter’s strongest performer, supported by higher oil prices, while Technology and Healthcare also advanced solidly. Utilities lagged as rising bond yields reduced the relative appeal of their dividend income. The market’s resilience was notable given the increasingly difficult interest-rate backdrop. In September, the Fed raised its policy rate by 0.25 percentage points to 3.75%–4.00% – its first increase since July 2023. Meanwhile, the 10-year Treasury yield climbed from 4.75% to around 5.3%, reaching levels last seen more than two decades ago. Interestingly, stronger earnings expectations helped offset this valuation pressure: the S&P500 traded at around 19 times forward earnings, with improving profit forecasts making valuations less demanding despite the quarter’s gains. The macroeconomic data revealed another sharp contrast. Second-quarter GDP growth was revised up from 1.5% to 2.2% annualised, yet consumer confidence fell to its lowest level since 2014. US bonds sold off sharply in Q3 2026, with September driving much of the decline: the 10-year Treasury yield rose 54 basis points during the month to 5.29%, while the 30-year reached 5.64%, taking their quarterly increases to 85 and 73 basis points, respectively. Persistent inflation, energy-price pressures and resilient growth prompted the Fed’s first rate increase since 2023 – 25 basis points to 3.75%–4.00% - with another quarter-point rise projected before year-end. Heavy government borrowing and long-dated AI-related issuance added pressure, while doubling Treasury liquidity-support buyback limits from USD 2 billion to at least USD 4 billion per operation failed to halt rising yields. The Bloomberg US Aggregate Bond Index lost 2.61% in September and 3.51% over Q3, reportedly its weakest quarter since 2022. Strikingly, Morningstar’s long-term Treasury index fell 8.0%, versus just 1.8% for its high-yield index, underscoring how interest-rate sensitivity proved more damaging than lower credit quality. In summary, September highlighted a familiar divide: strong corporate earnings and AI-related investment continued to support the largest companies, while higher borrowing costs and increasingly strained households weighed on the broader market.
     European equities reversed course in September, ending a five-month winning streak and wiping out the quarter’s earlier gains. The striking contrast was that stocks weakened just as business activity reached its strongest level in almost three and a half years: the eurozone composite PMI climbed to 53.1, a 41-month high, while data released during September showed second-quarter GDP growth of 0.6%. Economic resilience was no longer an unqualified positive for investors, however, as elevated energy prices and renewed inflation pressure reinforced expectations of tighter monetary policy. The ECB raised its deposit rate by 25 basis points to 2.50%, while subsequently published figures showed eurozone inflation accelerated from 3.2% in August to 3.8% in September – almost twice the ECB target. The energy shock created a particularly uncomfortable divide. Brent crude moved back above USD 100 per barrel during the quarter, while European natural gas traded above EUR 70/MWh for most of September. Higher energy prices supported producers but simultaneously raised costs for households and businesses, complicated the inflation outlook and increased pressure on equity valuations through higher bond yields. Europe also offered less direct exposure than the US and parts of Asia to the AI-related earnings momentum attracting investors. Improving activity and fiscal support therefore proved insufficient to prevent a negative quarter for the region. Within the eurozone, Energy was the quarter’s standout sector, while Financials and Materials also advanced; Real estate and Consumer discretionary were among the weakest areas. The UK provided a notable counterpoint, with the FTSE All-Share equity index advancing over the quarter, supported by its energy exposure, even as domestic inflation rose. Monetary policy diverged too: the Bank of England held its rate at 3.75%, although three of its nine policymakers voted for an increase. European bonds fell in Q3 as September intensified the sell-off. Heavy borrowing, notably German fiscal expansion, compounded inflation and monetary-policy pressures. Germany’s 10-year Bund yield closed at 3.58%, up 26 basis points in September and approximately 73 over the quarter. France stood out: quarterly government-bond losses exceedеа 5% and the spread over the Bund reached 119-basis-point – the widest since the euro-area debt crisis. Separately, a 67-basis-point jump was recorded in France’s 10-year yield in September to 4.84%, exceeding Italy’s 4.63% – an unusual reversal of the traditional sovereign-risk hierarchy. Despite unchanged policy rates, UK 10-year gilt yields reached their highest since 2007, closing at 5.41%, up 35 basis points in September; 30-year yields hit their highest since 1998! In short, September highlighted Europe’s difficult combination of stronger activity, renewed energy inflation and rising financing costs – an economy proving more resilient than feared, but a stock market unable to turn that resilience into gains.
   September brought another strong performance for the shares on the Bulgarian Stock Exchange (BSE) and ended an impressive third quarter. The flagship index SOFIX added 4.23% for the month, bringing its increase since the beginning of the year to almost 28%. Remarkably, in the third quarter alone, the index grew almost twice as much (17.3%) as in the entire first half of the year (8.8%)! However, the rally did not cover the market evenly: in September, the broad BGBX40 rose by 3.3%, while the small companies index beamX retreated by 0.46%. The trading exuberance continued: the monthly turnover on the BSE reached EUR 92 million, more than double compared to August. Additionally, as of September 18, the accumulated turnover exceeded that for the whole of 2025, and by the end of the month it reached 648 million. euros (almost +50% year-on-year). This is especially impressive, because 2025 itself was the strongest in terms of turnover for the last 12 years. The big corporate news came on September 24: Schneider Electric announced its intention to acquire the Bulgarian champion Shelley Group at a price of EUR 70 per share, valuing the company at approximately EUR 1.2 billion. However, for the successful closing of the deal and possible delisting from the stock exchange, regulatory approval is required, as well as reaching a minimum threshold of 95% of the capital ownership. Among the companies in SOFIX, Sopharma AD performed best for the month (+14.1%), while the weakest result camefrom Weiser Technology AD (-8.65%).
Sources: Bloomberg, BSE