Wall Street momentum traders having best run in three years

Expanding liquidity and dovish Fed provide backdrop for buoyancy across assets

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A lot of things got worse in September. The government shut down, US job prospects dimmed and debates around central bank autonomy grew deafening.

And yet in commodities, stocks and foreign exchange markets, the month will go down as a time when a simple bet that winning trades continue to win saw its best stretch in three years.

Gold surged 12 per cent, extending its upward march for the eighth time in nine months, while the Japanese yen slid further against the US dollar. Stocks from New York to Seoul built on a months-long advance that has now added around US$35 trillion (S$45.1 trillion) to share values worldwide.

Across assets and time zones, investors chased momentum practically everywhere, just months after many of the trades initially collapsed at the start of US President Donald Trump's tariff wars.

The trend is so strong in equities that it is starting to defy the efforts of money managers to keep up. Data from Jefferies Financial Group shows that the proportion of long-only actively managed funds beating benchmarks has fallen to 22 per cent in 2025, poised for the worst showing on record.

While fear of missing out is an ever-present anxiety that often spurs this kind of behaviour and may fuel further gains, other pillars of risk-taking have done their part to offset political and economic stress.

JPMorgan Chase strategists said in a note that liquidity in the economy the supply of money sloshing around bank accounts and money market funds, among other things has been steadily expanding for two years and become a major tailwind for asset prices. Add in a dovish Federal Reserve, and it is a backdrop for buoyancy across assets.