Parker G. Trasborg, CFP® (Senior Vice President) and Kevin E. Donovan, CFA (Portfolio Research Director) discuss the latest market trends from Q3 2025. Topics include the Fed’s first rate cut of the year, stock market performance, the April tariff sell-off and recovery, why staying invested matters, and how markets typically react to government shutdowns.
Introduction and Breast Cancer Awareness Month
Parker G. Trasborg:
Hello, thanks for tuning in. My name is Parker Trasborg. I’m a Senior Vice President here with CJM Wealth Advisers, and I’ve got Kevin Donovan, our Portfolio Research Director as always. We’re here to talk about the October, 2025 market update. And we’ve got our pink on because today is October 1st, the first day of breast cancer awareness month. So Kevin, we want to spend a couple minutes again to discuss markets throughout the third quarter. The Fed finally un-paused and cut interest rates for the first time this year. How did the markets react?
Market Reaction to the Fed Cutting Interest Rates
Kevin E. Donovan:
Well, markets track really well. The markets always like when the fed cuts rates, it lowers the borrowing cost for companies which could lead to potentially greater profits. Loosens up the economy a little bit. So the markets responded very positively and we can see in the first chart here that particularly the Nasdaq did very well this quarter. So it was up double digits. 11% in three months is a pretty good quarter for anyone, any index and the S&P 500, it also had a good quarter up almost 8% that was followed by the Dow in international markets. And then bonds were up 2%, which for bonds isn’t so bad, equates to about 8% for a year if you annualize it. So a good quarter overall.
Year-to-Date Stock Market Performance in 2025
If we look back on the year to date numbers in that chart, that looks really good. We have international, the international index is up over 22%.
Very good year for international stocks. Really outperformed earlier in the year though, when US stocks were suffering from the hits from the tariff announcements and the poor economic numbers in the first quarter. International stocks were outperforming by a lot back then. That’s carried through for the rest of the year so far. The NASDAQ is next, it’s up 17% and the S&P up almost 14%, which is pretty good. Bonds year to date so far are up 6.1%.
April 2025 Market Sell-Off and Recovery
But I want to point out something on this chart. You see that big dip right around the April timeframe and then the big V shape recovery that we had coming out of that, that was around the time when tariffs were announced by the administration and markets sold off really strongly on that news and the NASDAQ was down almost 20%. So actually it was a little bit over 20%.
So it was technically in a bear market. If you look at the next chart, what I call the don’t panic chart, this shows the recovery since the low at that time, which was April 8th. And you can see that the markets recovered off of that low, extremely strongly. The NASDAQ is up 48% since April 8th, and that is a remarkable recovery right there. And even the S&P is up 34% and international stocks 25%.
Why Staying Invested Matters
So this really reinforces the advantages of staying invested. Even if the market sells off strongly, you have a diversified portfolio that’s going to cushion that fall. And a big reason also to stay invested is you never know when the market’s going to turn. In this case, if you sold out when the market was down dramatically on April 8th and didn’t get back in until two days later, you would’ve missed one of the biggest market recovery days in history. So as we said that NASDAQ was up 48% since that low, but if you got in two days later, you would only have a return of 32% on the NASDAQs. You have missed out on 14 percentage points of return just by panicking and getting out when everyone else was selling invested works. And I think this is really strong example of that.
Parker G. Trasborg:
Yeah, I mean that’s a huge difference in performance there just from missing a couple of the best days. And it goes to those charts we sometimes pull up once in a while if you miss the best 10 days out of the last year of how much of an impact on the return it could make to your overall portfolio. So staying invested continues to be the key.
Parker G. Trasborg:
That’s great, Kevin. I think it was really a remarkable turnaround from the deep dive we saw with the tear of uncertainty and then the walk back on that, and it really does drive home. The markets hate uncertainty and they don’t like to be surprised, which is what happened in early April.
Government Shutdown and Market Impact
Now, the administration and Washington DC had kind of upset markets earlier this year. Today the government shut down. How do markets typically react during a government shutdown?
Kevin E. Donovan:
Yeah, it is hard in a video like this to talk about this because things may change tomorrow and the government could be open again. But typically for the markets, a government shutdown is not a time, it’s not a bad time for market performance. You may see more volatility, so we may have more sharply ups days and more sharply down days, but overall, the markets usually take these in stride. And once the government reopens, it’s back on full steam ahead. This is more a government DC issue than it is a corporate earnings issue.
Closing Remarks and Upcoming Webinar
Parker G. Trasborg:
And again, highlights the importance of continuing to stay invested. Well, that’s again all the time we have today. Thank you so much for listening. I wanted to promote a webinar we are doing on Thursday, October 16th at 12:00 PM. We are hosting Silver Bridges Consulting to discuss senior living options, and I hope you’re able to join us for that. Again, thank you for joining us today and as it’s October and we won’t be getting together until January. I wish you a very happy and cheerful holiday season. Thank you so much.
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