September has traditionally been the weakest month for shares, however not in 2025. In truth, the complete third quarter has been a deal with for traders, with U.S. equities marching to new highs and bouncing again from April’s tariff tiff.
Most of that optimism got here as Q2 earnings shocked to the upside, the AI-fueled commerce continued to achieve momentum, and traders piled on the bets that the Federal Reserve would lower charges.
Compounding current pleasure, earnings progress is anticipated to proceed, AI optimism continues with no clear ceiling, and traders lastly have the lower they had been on the lookout for.
That is to not say that there aren’t considerations. Equities are actually thought of “expensive” throughout numerous measures, the economic system appears to be teetering, and a authorities shutdown might delay the discharge of important financial information at a time the place the Fed desperately needs these insights.
However only for a second, bulls can relish within the full get better of equities from their April lows. Within the third quarter, here is how varied fairness indexes carried out from the shut on Jun. 30 to the tip of buying and selling on Sept. 30:
Russell 2000: 2,175.04 → 2,436.48 (+12.02%)
Nasdaq Composite: 20,369.73 → 22,660.01 (+11.24%)
S&P 500: 6,204.95 → 6,688.46 (+7.79%)
Dow Jones: 44,094.77 → 46,397.89 (+5.22%)
All 4 fairness benchmarks notched new file highs, together with the Russell 2000, which emerged from a years-long rut by setting its first file excessive since Nov. 2021 on charge lower optimism. It was the best-performing of the key benchmarks.
Nevertheless, there have been nonetheless envious performances for the massive cap-focused S&P 500 and Nasdaq Composite, which had their finest third quarter since 2020 and finest September since 2010.
And even the 30-strong Dow Jones Industrial Common, the worst performing amongst main U.S. fairness benchmarks, completed the quarter at a file excessive. It was its eighth of the yr, with all of them coming since Aug. 22.
Taken collectively, the positive factors within the index now characterize nearly all of their year-to-date positive factors. Ending off their final buying and selling day of the third quarter, the Nasdaq, S&P 500, Russell 2000, and Dow are actually up 17.34%, 13.72%, 9.37%, and 9.06% because the begin of the yr, respectively.
It stays to be seen how September’s unseasonable power will have an effect on the fourth quarter, which tends to be fairly robust for U.S. equities. Per analysis from LPL Monetary, the S&P 500 has averaged a 4.2% achieve from October by means of December. So if the previous is any indication, traders is likely to be in for much more larger highs within the quarter forward.
