Quarter-End Market Update
As of September 30, 2025
The third quarter brought a mix of economic shifts, strong market performance, and renewed investor focus on interest rates and corporate earnings. While daily headlines created some short-term volatility, staying invested and disciplined once again proved to be the most effective approach.
Economic & Market Overview
• Federal Reserve cuts rates: The Fed lowered short-term rates by 0.25%, signaling a gradual shift toward easier monetary policy. This helped support both stock and bond markets.
• Moderating but resilient economy: Economic growth showed signs of cooling, but consumer spending and services activity remained steady.
• Corporate earnings beat expectations: S&P 500 companies delivered roughly 5% year-over-year earnings growth, led by large technology and AI-related firms.
• Market rotation: After months of leadership by a few mega-cap stocks, smaller companies and value segments saw a rebound as investors broadened their focus.
Quarterly Index Returns (Total Return)
| Index | Q3 2025 Return | Notes |
|---|---|---|
S&P 500 | ~ +8.0 % | Driven by strong tech earnings and Fed policy shift |
Russell 2000 (Small Cap) | ~ +12.4 % | Rebounded as investors rotated beyond large caps |
MSCI EAFE (International) | — | Lagged due to currency headwinds and slower growth |
Bloomberg Barclays U.S. Aggregate Bond | ~ +2.0 % | Benefited from lower interest rates |
*Returns are approximate and reflect index total returns. Individual portfolio performance will vary.*
Staying the Course
Market volatility can be unsettling in the moment, but reacting to short-term news often leads to poor timing and missed opportunities. Your portfolio is built to weather these fluctuations and stay aligned with your long-term financial goals. Periodic rebalancing and diversification help keep your plan on track—without needing to make emotional, short-term moves.
Looking Ahead
We expect markets to remain focused on the Fed’s policy path, corporate earnings trends, and global growth. While uncertainty will always be part of investing, maintaining discipline and perspective remains key to long-term success.
Bottom line: Q3 delivered solid returns for both stocks and bonds. By staying patient, diversified, and focused on your financial plan—not the noise—you’re in a better position to pursue your goals.
Sources
1. J.P. Morgan Asset Management
The views stated in this piece are not necessarily the opinion of Cetera Advisors LLC and should not be construed directly or indirectly as an offer to buy or sell any securities. Due to volatility within the markets, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards.
The Bloomberg U.S. Aggregate Total Return Value Unhedged Index, also known as “Bloomberg U.S. Aggregate Bond Index” formerly known as the “Barclays Capital U.S. Aggregate Bond Index”, and prior to that, “Lehman Aggregate Bond Index”, is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS (agency and non-agency).
The MSCI EAFE Index is designed to measure the equity market performance of developed markets (Europe, Australasia, Far East) excluding the U.S. and Canada. The Index is market-capitalization weighted.
The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe and is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.
A diversified portfolio does not assure a profit or protect against loss in a declining market.
Rebalancing may be a taxable event. Before you take any specific action be sure to consult with your tax professional.