Quarter 3 2023

After surging in the first half of 2023, markets lost ground in Q3
as investors snapped out of their optimism as worries
about the economy began to bite.1


Is a recession coming? Is a bull market out of reach?


Let's take a look at what happened in Q3 and what might happen
in the final three months of the year.

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Looking Back

How Did Markets Perform Last Quarter?

S&P 500


The broader U.S. market lost ground in a weak third quarter as investors ran out of good vibes.1



The tech-focused NASDAQ dropped in Q3 as macroeconomic worries eroded investor confidence.1

DOW 30


The blue-chip Dow also fell on macroeconomic worries but held up better against its counterparts.1

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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.

Interest rates

The Federal Reserve indicated that it expects to raise rates once more in 2023. The expectation of higher rates is likely to impact markets.2

Economic data

Investors will be closely watching reports on housing, labor, consumer confidence, and other sectors for clues about the economy’s health and future Fed moves.

Recession indicators

Opinions as to whether the economy is slipping into a recession remain mixed and recession fears are likely to stoke market volatility.3

U.S. Politics

Repeated fiscal showdowns in Washington and the ramp-up of 2024 election news could inject extra uncertainty about politics.4

Retail spending

The holiday shopping season is critical for retailers so investors will be monitoring trends for insights about consumer spending.

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"Markets had a weak third quarter, but it’s very possible that investors will regain their optimism in Q4."

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Bottom Line

Key Takeaways for Savvy Investors

What conclusions should we draw from a rocky third quarter?

Progress is not linear.

Though worries about the economy dogged markets this quarter, all is not lost.

There is plenty to be optimistic about.

The economy is still chugging along and the labor market continues to show strength.5

The major challenge ahead is that the Fed must maintain a delicate balance between keeping interest rates high enough to fully douse inflation while not triggering a recession.

Until that job is done, markets are likely to respond with volatility to any news that points to higher interest rates. 

Will we still see a recession in 2023?

That’s hard to say because by the time we know the answer, we’ll likely already be in 2024.

Plenty of economists believe that the risk of a recession is low.3

Others see red flags and think that we won’t be able to avoid a recession this year or next.3

We’ll just have to wait and see which prediction is correct.

Bottom line: we’re watching the data, staying flexible, and looking for opportunities.

Questions about markets or your portfolio? Please reach out. We'd be happy to chat.

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.