The

Financial

Quarterly

Quarter 3 2025

SSCM Research

Spectrum Strategic Capital Management

Markets soared for another quarter, solidifying the gains achieved in earlier in the year with multiple indexes hitting new highs.¹

Can stocks keep rallying with tariffs, growth fears, and political woes?

Let’s take a look at the past quarter and discuss what could lie ahead in the final months of the year.

Looking Back

How Did Markets Perform Last Quarter?

S&P 500

7.8^%

The broad market index notched its best third quarter since 2020.¹

NASDAQ

11.2^%

The tech-focused NASDAQ also turned in a great quarter, driven by soaring AI hopes.¹

DOW 30

5.2^%

The blue-chip Dow grew with the broader market and achieved its fifth straight month of gains.¹

Looking Ahead

What Factors May Influence Markets in the Months to Come?

Let’s take a look ahead at some of the factors that we’ll be watching in the weeks and months ahead.

Economic Growth

Growth predictions are mixed, with some analysts forecasting a deceleration and others putting recession odds as high as 40%. A key concern is the job market, which is showing the weakest growth we've seen since the pandemic.^2,3

Stock Valuations

Stocks are pushing record highs, but the gains have largely been concentrated in a few sectors and companies. If sentiment turns against these high-flyers, we could see a retreat.⁴

Interest Rates

The Fed is expected to cut rates again before the end of the year, which could support market growth. But if inflation picks back up, those cuts could be delayed, which could spook investors.⁵

Tariffs

Tariffs are still being negotiated and finalized, and many companies have stocked up on inventory to avoid passing on higher costs. The impact on consumer and business spending may impact economic growth.⁶

“When stocks and the economy tell different stories, it’s time for caution and patience.”

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Bottom Line

Key Takeaways for Savvy Investors

What should we make of another strong quarter when the underlying picture is more complicated?

There's a growing gap between market optimism and economic concerns. Stocks keep hitting new highs while growth concerns mount. This disconnect means surprises - in either direction - could drive significant market swings.

Concentration increases fragility. When a handful of stocks drive major market gains, as we're seeing now, the rally can reverse quickly if those leaders stumble. That’s why we focus on long-term strategies, rather than chasing a few winners.

The Fed's balancing act gets trickier from here. Rate cuts could provide support for markets, but tariff costs working through to consumers could complicate the picture.

If inflation resurfaces, the Fed may have less room to help a slowing economy, and that scenario could catch investors off guard.

Our outlook: stay balanced, stay patient. Market strength is encouraging, and we remain optimistic about the economy's long-term resilience.

We’re keeping an eye on market trends, and we’ll make the adjustments we deem necessary to meet the objectives of your stated policy.

Questions about navigating this? Let's talk.

SSCM Research

Spectrum Strategic Capital Management

(503) 746-9765

info@sscapm.com

Sources:

Reuters, 2025 [URL:https://www.reuters.com/business/wall-street-futures-fall-investor-jitters-over-looming-government-shutdown-2025-09-30/]
CNN, 2025 [URL:https://www.cnn.com/business/live-news/us-jobs-report-august-2025]
US News, 2025 [URL:https://money.usnews.com/investing/articles/recession-2025-what-to-watch-how-to-prepare]
Reuters, 2025 [URL:https://www.reuters.com/commentary/breakingviews/us-markets-present-double-concentration-risk-2025-08-28/]
Morningstar, 2025 [URL:https://www.morningstar.com/economy/fed-cuts-rates-signals-more-come-2025]
Deloitte, 2025 [URL:https://www.deloitte.com/us/en/insights/topics/economy/us-economic-forecast/united-states-outlook-analysis.html]

The S&P 500 is a stock index considered to be representative of the U.S. stock market in general. The NASDAQ Composite Index is an unmanaged composite index of over 2,500 common equities listed on the NASDAQ stock exchange. The Dow Jones Industrial Average is a price-weighted index that tracks 30 large, publicly traded American companies.

All index returns exclude reinvested dividends and interest. Indices are unmanaged and cannot be invested into directly.

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