Third Quarter Commentary

• U.S. equity markets reached record highs with continued investment in artificial intelligence and technology, despite stretched valuations and lingering uncertainty. Large-cap equities, represented by the S&P 500, rose 8.1%, driven once again by the “Magnificent 7,” which gained 17.0%. Mid-cap equities also performed favorably, as the Russell 2500 returned 9.0% for the quarter, while small caps posted strong gains, with the Russell 2000 up 12.4% over the same period.

• International developed and emerging markets rose alongside U.S. equities during the quarter and continue to outperform on a year-to-date basis. The MSCI EAFE Index gained 4.8% for the quarter, lagging the S&P 500. Emerging markets performed exceptionally well, with the MSCI EM Index advancing 10.6%, supported by commodity strength and improving sentiment across Asia.
• At its September FOMC meeting, the U.S. Federal Reserve cut the federal funds rate by 25 basis points, bringing the target range to 4.00%–4.25%. Chair Powell emphasized that rising unemployment and slowing job growth have increased downside risks to the labor market. Current projections suggest the Fed may implement two additional 25 basis point cuts in 2025, though FOMC members remain divided amid ongoing economic uncertainty.

• During the quarter, the yield curve marginally steepened as short-term rates declined while intermediate and long-term yields remained relatively unchanged, reflecting the Fed’s September rate cut, labor market concerns, and persistent uncertainty surrounding inflation and growth. Additionally, Investment-grade (IG) and high-yield (HY) credit spreads continued to tighten over the quarter and remain near their all-time lowest spread levels.

To view the third quarter reports, click on the links below: 

• 3Q25 Global Positioning Statement
• 3Q25 Global Equity Review
• 3Q25 Taxable Fixed Income Review
• 3Q25 Tax Exempt Fixed Income Review
• 3Q25 Real Assets Review
• 3Q25 Private Equity Review
• 3Q25 Private Credit Review