October 2025

Newsletter October 2025

October Recap

New Members Onboarding: We kicked off the month by welcoming our new members with a Jeopardy night! After introductions, everyone split into four teams for several rounds of questions. The categories included Technical Knowledge, Brain Teasers, WiF History, General Knowledge, and Market Awareness. It was a fun way to bond and pick up some useful insights. Building on this energy, we moved into career exploration activities.
Discovering Careers in Finance: To support our new joiners and share experiences, several members gave short presentations. They spoke about the fields in which they have gained experience and shared their personal journeys. We heard about IB, Sales & Trading, Equity Research, Private Equity, Private Credit, Asset Management, and Hedge Funds. The session gave everyone a firsthand look at career options in finance. Two of our members also took part in the JPMorganChase 2025 Winning Women event in Paris!
Practicing Case Studies: With summer internship applications and ACs just around the corner, our final workshop of the month focused on the most common case studies found in selection processes. One of our members gave an incredibly helpful presentation, packed with tips on approaching case studies effectively. Afterwards, we split into groups to put that advice into practice by tackling a case study of our own.

Don’t miss out on our social media where we post our weekly tips, market news, and market quizzes as well as stories of women that keep inspiring us!

News Recap

Nvidia reaching $5 tn Market Capitalization

October has seen the continuation of trends in tech group valuations. In fact, after Nvidia became the first public company to reach $4 tn in market capitalization, it has now reached an even higher milestone of $5 tn. Meanwhile, Apple hit $4tn for the first time last week.

Nvidia’s stock was propelled by strong sales of its AI systems and prospects of expansion to the Chinese market. While the company does not have access to China due to US export controls, the recent agreement between Trump and Xi Jinping opens the way for potential semiconductor export opportunities in the coming months.

The tech giant has benefited largely from the explosion of AI, which has increased demand for its chip technology, which is useful for training models such as OpenAI’s. Moreover, it can be confident in sustaining this growth in the long term, given the number of deals concluded this year to build data center infrastructure worldwide.

Nvidia’s Market Capitalization Growth, 2021–2025

The Race to become the next Federal Reserve Chair

The US Secretary Scott Bessent is leading the process to find Powell’s successor as the Federal Reserve chair, currently starting the second round of interviews. Here are the top candidates:

Kevin Hassett: Served in both Trump administrations and is currently heading the National Economic Council. Even though he hasn’t spoken much about his plan for the US central bank, many consider him the favorite.

Kevin Warsh: Almost having received the position of Fed chair in 2017, he has high credibility for the role. He criticizes the Fed's balance sheet expansion.

Christopher Waller: He was the first central banker to call for cuts this year and has worked inside the Fed for more than a decade.

Michelle Bowman: She is leading the charge to ease regulatory requirements on US banks.

Rick Rieder: He impressed Treasury officials during the first round of interviews and is calling for more cuts, justifying this by pointing to weak job creation and stable inflation.

Technicals Explained:Volatility Clustering and its Causes

In many of our lectures, we assume stable volatility in asset prices. However, in 1963, mathematician Mandelbrot described the financial phenomenon of volatility clustering. He observed that, in his own words, “large price changes tend to be followed by more large price changes, positive or negative. Small changes tend to be followed by more small changes.” In other words, there exists a non-zero (auto)correlation between past and future short-term volatilities.

One of the most important causes for volatility clustering is human behaviour. Investors are often fear-driven, and instead of trusting their own analysis of the asset price, they draw conclusions from the price movements of previous days. Consequently, they tend to overreact and panic-sell in periods of stress and underreact in periods of calm.

Relevance in today’s markets

In recent times, volatility has been a concept widely discussed in the news. From tariff wars to interest rate changes, market players have seen their investment values fluctuate significantly, yet the environment has remained relatively low-volatility, which, according to the International Monetary Fund, may soon change drastically.

For investors, it means they can adjust their portfolios to their preferred risk level by accounting for volatility's tendency to cluster. In a sense, that means that volatility can be partially predicted. Whenever the financial markets enter a high-volatility period, investors can try to forecast the likelihood of further volatility, improve option pricing, and make more informed decisions.

Implications

Even though we can conclude that short-term volatility is predictable to an extent, this does not apply to returns: investment returns do not cluster or follow any consistent patterns. Hence, volatility clustering does not contradict the efficient market hypothesis, as we can forecast risks rather than prices. In addition, it does not mean that a low-volatility period will remain low, or vice versa. Markets face numerous policy, trade, and other shocks and respond accordingly.

News Highlight:Effects of President Trump's New Tariffs on Crude Oil

On 22 October, the US proposed sanctions on two of Russia’s major oil companies, Rosneft and Lukoil. These would be the strongest US measures against Moscow since Russia’s invasion of Ukraine in 2022. Specifically, these sanctions would stop the two companies from transacting in US dollars, effectively limiting dollar liquidity and Western market access, likely shrinking Russian export revenue.

Although the sanctions are scheduled to take effect from 21 November, they have already triggered a sharp rise in crude oil prices. Essentially, the sanctions would reduce oil supply whilst potentially increasing the costs for these firms to operate in the US. In the long run, the implementation of these sanctions could lead to cost-push inflation due to the supply shock.

Whilst oil prices are certainly rising, as seen in the graph, experts argue over whether the market truly believes the sanctions will be imposed. This is because the gravity of such policies would lead to prices soaring by more than $6. Over the next few days, the market should settle on the news, as President Trump may address the policies in greater detail.

Sharp Rise in Crude Oil Prices After Sanctions News

Debate Section: If the AI Bubble Pops, Who Wins?

Pro The question dominating markets this October is whether the AI market has entered bubble territory. Instead of debating whether an AI bubble exists, I want to focus on the view that, if it does, it may signal opportunistic capital reallocation.

With the rise of AI, massive investments are flowing into computing power. In this context, it’s useful to distinguish between producers and consumers of compute. Producers of compute are companies that build and sell computing capacity, such as NVIDIA, AMD, or Amazon, while consumers of compute are companies that use that capacity to train models and develop AI applications, such as OpenAI, Anthropic, or other AI-focused startups. To meet expected AI demand, consumers of compute depend on producers of compute to make proportional investments in infrastructure, as reflected in the recent massive data center buildout.

Should the AI boom prove to be a bubble and future demand fall short of expectations, the resulting oversupply of computing capacity would drive down the price of compute. For producers of compute, lower prices would squeeze margins, depress valuations, and trigger the feared market correction. However, for compute consumers, cheaper compute would reduce one of their largest costs and improve profitability. Stronger margins would lift earnings per share and cash flow, helping to justify the already elevated valuation multiples.

Therefore, I believe that if an AI bubble does exist, we need not fear a potential ‘crash’. Instead, we should view it as an opportunity to understand the upcoming reallocation of capital, where producers of compute may face a correction, while consumers of compute could remain an attractive investment opportunity.

Con

Due to the unpredictable nature of markets and human behaviour, it is essential to consider a much more pessimistic outcome: an AI bubble bursting. As Kristalina Georgieva, the IMF's chief, warned: "Buckle up: uncertainty is the new normal and it is here to stay."

There is no denial that producers of compute will suffer dramatically. Falling demand and a price crash will lead to overcapacity in AI infrastructure (such as data centers), resulting in high depreciation costs. Not even a giant like NVIDIA is immune; chipmakers might face huge inventory write-downs resulting from shrinking chip orders. A bubble burst might also have broader macroeconomic implications, including layoffs, a decline in investment, and even a market correction.

It is still debatable whether the potential gains for compute consumers from falling prices will be enough to offset the negative effects of a shrinking AI sector. The industry relies on investor confidence; therefore, if sentiment turns, AI firms and startups will struggle to raise capital, forcing them to cut R&D costs and scale back operations. Even with a decline in compute prices, firms may struggle to grow, let alone survive. This hurts the most crucial factor for development: innovation.

Innovation is essential in tech and AI-related sectors, as it drives the industry's long-term value. The current world is heavily dependent on AI and technology, which are increasingly incorporated across industries such as healthcare and education. Without innovation, we should really ask ourselves whether and how we can adapt to changing market conditions and continue to progress even without the assistance of AI, which is already considered excessive.

While a bubble burst may not turn out as catastrophic as described, we should still approach the issue with caution and be prepared for any outcome.

Finance x Sustainability - Finance as a Power House of the Green Shift

Over the past two weeks, global finance has rapidly shifted from aspiration to action, fueling sustainable technology. Battery-recycling firm Redwood Materials raised $350 million from Eclipse Ventures and NVIDIA's investment arm. This boosts the U.S. clean-energy supply chain and access to battery materials for AI-driven data center growth. NextEra Energy and Google signed a 25-year deal to restart an Iowa nuclear plant, providing long-term, carbon-free power for Google’s cloud operations and modeling direct Big Tech participation in energy infrastructure. Brookfield Asset Management and Cameco Corporation signed an $80 billion U.S. nuclear deal with Westinghouse, backed by government financing and possible IPO warrants, enabling Westinghouse to accelerate nuclear project delivery and expand U.S. capacity.

Together, these events show how finance, technology, and sustainability are converging. This forms a new investment thesis: low-carbon infrastructure as a core growth engine. For investors, the message is clear—recent deals directly accelerate the deployment and scaling of cleaner infrastructure, making it a central engine for growth moving forward. The future of capital isn’t just digital or green—it’s both.

BlackRock Bets on Nuclear Energy as the Next Green Revolution

In October, BlackRock announced a $10 bn clean-energy infrastructure fund to finance small modular nuclear reactors (SMRs), a move that could redefine sustainable investing. For years, nuclear energy was viewed as controversial, but growing energy demand and net-zero targets are forcing investors to reconsider its role. SMRs promise cheaper and faster deployment than traditional plants, making them increasingly attractive to both governments and asset managers. BlackRock’s initiative signals a broader shift: sustainability is no longer limited to wind and solar, but now includes technologies capable of providing constant, carbon-free power. The fund also reflects a strategic alignment between finance and energy security, as geopolitical tensions make supply diversification essential. If successful, this could mark the start of a new investment narrative: one where “green” and “nuclear” coexist.

2 Truths & 1 Lie

Results will be posted to Instagram!

Gold prices reached an all-time high in September 2025 as investors sought safe-haven assets amid rising geopolitical tensions.
The Bank of Japan ended its negative interest rate policy this year, marking its first rate hike since 2007.
The U.S. dollar weakened sharply against the euro in 2025 as the Federal Reserve signaled further rate hikes.

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What’s next?

We are looking forward to all of the workshops we have planned in the upcoming month!

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