September 2025 Market Review & Commentary

We hope you are doing well and enjoying the recent cooler fall days. As the leaves begin to change, we are looking forward to our annual fall family trip to Bar Harbor, Maine. This will be our 12^th consecutive trip, and If you are traveling over the longer holiday weekend, we hope that you have safe and enjoyable trips.  

Market Performance: July to September

In July, the markets delivered consistent gains, attributed to favorable economic updates, global trade developments, and robust corporate earnings for the second quarter. The announcement of a trade agreement with Japan further supported the positive momentum. Conversely, the trade agreement between the United States and the European Union had minimal effect on investor sentiment, while the Federal Reserve's decision to maintain interest rates at the end of July welcomed back some market instability and volatility.

In August, markets initially responded to a weaker jobs report but rebounded following optimistic inflation data, prompting speculation regarding potential adjustments to short-term interest rates by the Federal Reserve (highlighted in last monthly review). Investor confidence improved after Federal Chair Powell indicated at the Jackson Hole symposium that employment concerns outweighed inflation risks, suggesting a readiness to consider rate reductions.

September was marked by a gradual increase in market momentum, especially within technology stocks, which advanced following the Federal Reserve’s predicted rate cut. Despite temporary volatility introduced by Chair Powell’s cautious remarks on market valuations, markets concluded the quarter with strength, even amidst ongoing Congressional budget negotiations. For September, the S&P 500 recorded a gain of +3.53%, while the Nasdaq increased by +5.61%. Sector performance was varied, with Consumer Staples, Materials, and Energy posting negative returns.

Looking Ahead: Key Market Catalysts

By mid-October, companies are anticipated to commence reporting third-quarter corporate earnings. These results, together with investor valuations, will be central in shaping stock price movements; consequently, investors will closely analyze these indicators for any implications regarding the 2026 outlook. Later in October, the estimate of third-quarter gross domestic product (GDP) will be released. Since August, upward revisions to GDP forecasts have emerged, with some economists now projecting growth above three percent. The underlying factors driving this expansion will attract significant market attention as expectations for 2026 begin to form. The Federal Reserve is scheduled to hold their next meeting on: October 28th–29th.