Monthly Market Review - September 2025
September 2025 continued the summer rebound as an interest‑rate cut by the U.S. Federal Reserve and steady corporate earnings supported sentiment. The MSCI World Islamic Index rose 4.5%, lifting its year‑to‑date (YTD) return to 15.8%*, while the Dow Jones Sukuk Index gained 0.8%*, taking its YTD return to 6.6%*. The U.S. dollar was flat, whereas gold had its best month this year, rising 11.7% in September on rate cut expectations and escalating geopolitical tensions.
In the United States, the S&P 500 hit its record high after the Fed’s 0.25-percentage-point rate cut. Inflation stood at 2.9%* in August, slightly higher than the previous month, suggesting tariff-related price pressures may still emerge. GDP growth for Q2 was revised up to 3.8% from 3.3%, rebounding after a weak first quarter. Unemployment stayed low at 4.3%*, though hiring has cooled as companies act cautiously amid uncertainty, although large-scale layoffs remain limited.
The Bank of England kept rates unchanged at 4.0% in September, after August’s cut, as it weighed persistent inflation against weak growth. Inflation held steady at 3.8% year over year, while manufacturing activity, as indicated by the manufacturing index 46.2*, remained weak. Hiring has slowed, and businesses are delaying recruitment due to tax concerns and broader economic uncertainty.
In the Eurozone, the manufacturing index dipped slightly to 49.5*, slipping back below 50 after briefly moving above it last month, indicating a mild slowdown in industrial activity. Inflation stayed near 2.0%, in line with the European Central Bank’s target, so the ECB kept its rate steady at 2.0%.
In China, the economy remained soft, with the official manufacturing PMI at 49.8* for a sixth straight month below 50, while non-manufacturing activity hovered just above the expansion line. Real Estate activity remained weak as authorities announced new steps to support housing project completions and to ease financing for local governments.
Markets across the board have had a strong run this year. Looking ahead, markets remain sensitive to policy actions, tariffs, and geopolitical developments. Given the gains so far, it’s wise for investors to stay diversified and remain invested, as this helps cushion portfolios in case of a market correction while keeping them positioned for long-term opportunities.
Sources
- (Analysis, 2025)
- (Abdulla, 2025)
- (Reuters, Instant view: ECB holds rates steady at 2%, lowers inflation forecasts, 2025)
- (Reuters, China non-manufacturing activity slowed in September, PMI shows, 2025)
- (Reuters, China says fiscal support will remain flexible, debt ratio stays reasonable, 2025)
* Economic Indicator Database
Disclaimers:
*The MSCI World Islamic Index is a stock market index that measures the performance of large and mid-cap companies across developed markets that comply with Sharia investment principles.
*The Dow Jones Sukuk Index is a benchmark that measures the performance of global, investment-grade, U.S. dollar-denominated Islamic bonds, also known as sukuk, which have been screened for compliance with Sharia law.
*A basis point (bps) is a standard unit of measure in finance equal to one-hundredth of a percentage point (0.01%), used to precisely denote changes in interest rates, bond yields, and other financial percentages.
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As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
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