The 3rd quarter was great for investors as just about everything appreciated in an orderly manner. All equity asset classes marched higher, bond yields declined, leading to an increase in prices, and most everything else we track (except oil) appreciated.
The biggest market news of the quarter was the Federal Reserve cutting interest rates for the first time in 2025, setting the new target rate to 4.125%. The Fed also signaled they will likely cut twice more before the end of the year.
Technology companies were the biggest gainers in the quarter, led by Google (Alphabet), which was up 37% Meanwhile, consumer defensive stocks (Costco, Target, Coke) lost 3%.
Price Action
Broad US Stocks continued their strong run, gaining 8% in the quarter, and small-cap value was the best major equity asset class, appreciating 12%. Emerging Markets was also a strong performer, up 10%, with China leading the way, gaining 20%.
Gold had a historic quarter, gaining 17% and reaching the all-time high of $3,873, leading some to speculate there is underlying concern with the independence of the Fed, inflation, and ultimately the dollar.
In a reversal of last quarter, small-cap value was the best-performing part of the U.S. Market.
REITs continued their relatively poor year, gaining 4.6% in the quarter.
The yield curve continued to steepen with short-term interest rates falling faster than longer-term rates. On the whole, it was a solid quarter for bonds with credit spreads tightening to historic lows.
In Cryptocurrency space, the second-largest coin by value, Ether, rose 65%, while Bitcoin gained 6.4%.
Housing prices rose 0.4% for the last 3 months we have data.
Looking Forward The government shutdown could pose a threat to the market if it endures for a prolonged period, though dysfunction in the nation’s capital is nothing new, and markets tend to be unfazed.
On the economic front, job reports have recently had poor readings, but GDP has stayed robust, and inflation running around 3% is above the Fed’s target. These contrasting data points will make the Fed’s path challenging in the coming months.
Stock market valuations continue to rise, with the forward p/e of the S&P 500 at 23. Corporate earnings growth will need to outpace historical averages to justify current prices.
Rialto Wealth Management is a fee-only, fiduciary, advisory firm based in Syracuse, NY. From financial planning to investment management, we help families across New York and beyond. We can be reached by phone at (315) 992-9129 or via email through our website’s secure and confidential contact page.
Q3 2025 Market Commentary
October 22, 2025 by Ethan Gilbert
The 3rd quarter was great for investors as just about everything appreciated in an orderly manner. All equity asset classes marched higher, bond yields declined, leading to an increase in prices, and most everything else we track (except oil) appreciated.
The biggest market news of the quarter was the Federal Reserve cutting interest rates for the first time in 2025, setting the new target rate to 4.125%. The Fed also signaled they will likely cut twice more before the end of the year.
Technology companies were the biggest gainers in the quarter, led by Google (Alphabet), which was up 37% Meanwhile, consumer defensive stocks (Costco, Target, Coke) lost 3%.
Price Action
Broad US Stocks continued their strong run, gaining 8% in the quarter, and small-cap value was the best major equity asset class, appreciating 12%. Emerging Markets was also a strong performer, up 10%, with China leading the way, gaining 20%.
Gold had a historic quarter, gaining 17% and reaching the all-time high of $3,873, leading some to speculate there is underlying concern with the independence of the Fed, inflation, and ultimately the dollar.
Looking Forward
The government shutdown could pose a threat to the market if it endures for a prolonged period, though dysfunction in the nation’s capital is nothing new, and markets tend to be unfazed.
On the economic front, job reports have recently had poor readings, but GDP has stayed robust, and inflation running around 3% is above the Fed’s target. These contrasting data points will make the Fed’s path challenging in the coming months.
Stock market valuations continue to rise, with the forward p/e of the S&P 500 at 23. Corporate earnings growth will need to outpace historical averages to justify current prices.
Rialto Wealth Management is a fee-only, fiduciary, advisory firm based in Syracuse, NY. From financial planning to investment management, we help families across New York and beyond. We can be reached by phone at (315) 992-9129 or via email through our website’s secure and confidential contact page.