Third Quarter 2025 Market Newsletter

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EXECUTIVE SUMMARY

Read the full market newsletter HERE

The third quarter of 2025 saw strong gains across all major equity categories, fueled by resilient corporate earnings, optimism surrounding Artificial Intelligence, trade deals and a Federal Reserve interest rate cut.
The Federal Reserve cut interest rates by a quarter of a percentage point saying the economy was slowing and that risks to employment were increasing.
Despite persistent concerns over inflation and economic contraction, the U.S. economy has several points of resilience that offer a silver lining. Consumer spending is healthy, and trade negotiations are advancing.
The top 10 companies in the S&P 500 account for over 40% of the index’ market capitalization and a sizable portion of overall earnings and investments.
The estimated earnings growth rate for the S&P 500 for the third quarter of 2025 is 8.0%. If expectations are met, it will be the ninth consecutive quarter of earnings growth for the index.
The economic performance of non-U.S. countries has shown mixed results.
Despite lower earnings growth and earnings quality, foreign stocks have had strong performance this year, helped by low relative valuation and a weakening US dollar.
The key to navigating periods of potential turmoil lies in adopting a broad, long-term perspective. Maintain a sound financial plan tied to your specific goals and stick to it.

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