Tuesday’s action marked the end of the third quarter of 2025.
Curious about how to navigate all-time highs as we close out 2025? Join our team on Thursday, October 2nd at 1PM EST to discuss the technical and macroeconomic "Weight of the Evidence" heading into Q4.
Speakers Include:
- John Lewis, Senior Portfolio Manager, NDW
- Phil Mackintosh, Chief Economist, Nasdaq
- Yanni Angelakos, Head of Investment Insights, Nasdaq
- Miles Clark, Research Analyst, NDW
To register, click HERE
We also present to you our full-length quarterly report, going into greater detail across broad asset classes as we move into Q4. Note, this has been approved for financial professionals and non-professionals alike. Download the report HERE
Tuesday’s action marked the end of the third quarter of 2025. Reports over the next week will go into greater detail about changes or lack thereof in the third quarter, along with how market action impacts our stance for the fourth quarter. To begin, the table below looks at the performance of asset class ETFs with accompanying commentary.
Domestic Equities
Q3 was one of the best third quarters over the last decade with the SPDR S&P 500 ETF Trust (SPY) gaining 8.12%. Continued strength from technology, communication services, and consumer discretionary led to strong performances from growth-oriented areas of the market. The Invesco QQQ Trust (QQQ) gained nearly 9% during the third quarter while the Invesco S&P 500 Equal Weight ETF (RSP) lagged with a gain of 4.83%. While the equal-weighted large cap representative lagged, small caps had a fantastic quarter. The iShares Russell 2000 ETF (IWM) rocketed higher with a 12.45% return in Q3; however, IWM still lags SPY and QQQ year-to-date.
International Equities
While small caps played catch-up on the domestic front, emerging markets caught with developed markets in Q3. The iShares MSCI Emerging Markets ETF (EEM) gained 10.70% in the third quarter, moving its year-to-date performance up to 28.91%. Developed market representative EFA, the iShares MSCI EAFE ETF, posted a positive 4.45% return for the quarter but gave up its year-to-date performance lead over EEM in the third quarter. Chinese equities were the largest driver of emerging markets rallying in Q3 and they continue to show a tendency for volatility. Nonetheless, there is broad strength in international equities to choose from on either side of the risk spectrum.
Commodities
Precious metals continued their onslaught in the third quarter with the SPDR Gold Shares (GLD) gaining 16.61%, which moves its year-to-date return up to 46.81%. The strong performance from precious metals carried broad commodities representatives higher with the iShares S&P GSCI Commodity Index Trust (GSG) gaining 4.22% in Q3. The lackluster performance from broad commodities despite the strength of precious metals highlights the lack of broad strength within the asset class. The energy space has been mostly rangebound over the last two quarters, hampering the asset class from competing with domestic or international equities.
Fixed Income
Fixed income had a relatively quiet quarter that culminated in the Fed lowering interest rates in September. While fixed income representatives performed well heading into the announcement, there was an element of “Buy the rumor, sell the news,” as intermediate interest rates rose following the cut. The lack of a clear trend on intermediate and long-term interest rates is troubling for fixed income investors expecting a big payday into Fed easing the front-end of the curve.
