Domestic Markets:
Fresh records continued to be set across all major U.S. indices, with growth and small cap sectors leading the way over their counterparts (Russell 1000 Growth up +10.5%; Russell 2000 Small Cap up 12.4%). The Russell 3000 (a measure of total stock market performance) was up over 8%.
Major themes:
Enthusiasm around artificial intelligence, expectations for multiple rate cuts now in 2025 from the Federal Reserve, strong Q2 corporate earnings and GDP data supported by strong consumer spending, all created tailwinds for equity markets.
International Markets:
Emerging markets (MSCI EM Index up almost 11%) outperformed U.S. and International Developed equities during Q3.
Bonds:
Core bond prices gained 2% in Q3. August treasury auctions were weak and worrisome, but September auctions showed good demand, especially for 10-year notes. Corporate bonds, including high-yield corporate bonds, were up over 2.5% for the quarter as well.
Commodities:
Silver and gold continued to show incredible strength during the quarter, up over 29% and nearly 17% respectively. Grains declined during the quarter and crude oil stayed relatively flat as it continues to deal with various international pressures.
The Russell 1000 Index consists of the 1,000 largest companies by market capitalization in the Russell 3000 Index, which represents approximately 90% of the total market capitalization of the Russell 3000 Index. It is a large-cap, market-oriented index and is highly correlated with the S&P 500 Index. Indexes are unmanaged and cannot be invested in directly.
The Russell 2000 Index is generally representative of the 2,000 smallest companies by market capitalization in the Russell 3000 index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.
The MSCI EM (Emerging Markets) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the emerging market countries of the Americas, Europe, the Middle East, Africa and Asia.
The prices of small cap stocks are generally more volatile than large cap stocks.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Bonds are subject to availability, change in price, call features and credit risk.
The market value of corporate bonds will fluctuate, and if the bond is sold prior to maturity, the investor’s yield may differ from the advertised yield. The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.
