In the closing quarter of 2025, all three major US indices posted positive returns. The S&P 500 was up 2.35%, the Dow Jones Industrial Average gained 3.59%, and the Nasdaq Composite jumped 2.57%.
Global Equity Markets all showed positive returns: Developed Markets Outside the US led the way, Emerging Markets were a close second, and US Markets trailed. Across the board, value outperformed growth and large caps outperformed small caps. Bond markets in the US and Globally posted modest positive returns during the quarter.
In US Markets, the quarter began with the longest government shutdown in US history, lasting until 11/13/2025. The shutdown hindered data reporting for the economy, though partial government and private sector data filled the gap allowing markets to digest needed information. The Federal Reserve Board acted to make two rates cuts of 25bps each during the quarter, leaving the Federal Funds target rate range at 3.50-3.75%. The Healthcare sector lead the way in returns during the quarter attributed largely to underlying tech-driven efficiency gains from Artificial Intelligence. The performance poses an interesting development as other sectors seek to leverage AI. In the finishing days of the quarter, Q3 GDP was reported at 4.3%, up from the second quarter’s 3.8%. This represents the strongest two consecutive quarters of growth since 2021.
The close of 2025 marked US stocks notching their third consecutive year of double-digit gains, but it wasn’t the smoothest ride. This year’s climb came despite tariff uncertainty, interest rate changes, and concerns about the durability of AI’s gains—not to mention 43 days of government shutdown. It serves as a valid reminder to the importance of tuning out the noise and staying the course with a long-term investment plan.
| TOT RETURN 3-MO* | TOT RETURN 12-MO* | TOT RETURN 3-YEAR* | TOT RETURN 5-YEAR* | CLOSING VALUE | |
|---|---|---|---|---|---|
| S&P 500 | 2.35% | 16.39% | 21.26% | 12.75% | 6,845.50 |
| Dow Jones Industrial Average | 3.59% | 12.97% | 13.18% | 9.45% | 48,063.29 |
| NASDAQ Composite | 2.57% | 20.36% | 30.46% | 12.52% | 23,241.99 |
Source: Morningstar. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are unmanaged indexes. It is not possible to invest in an index. Past performance is no guarantee of future results. * Price only. Does not include dividends.
All overviews and commentary are intended to be general in nature and for current interest, educational purposes and factual reference only and are subject to change based on market and other conditions.