Market Recap – August 2025
- Slowing jobs data reinforced expectations the Federal Reserve may begin cutting rates as early as September.
- U.S. equities: S&P 500 up 2.0%, supported by strong Q2 earnings growth (~11.9% y/y).
- Leadership shift: Small-cap and value stocks outpaced large-cap growth as AI enthusiasm cooled and rate-cut hopes broadened gains.
- International developed: Strength in Europe and Japan as trade progress supported sentiment.
- Emerging markets: Gains as China’s trade truce extension supported risk appetite.
- Bonds: Prices rose broadly on rate-cut expectations; high-yield continued to lead.
- Other assets: Gold hit a new high alongside a softer U.S. dollar.
- Balanced snapshot: A globally diversified 60/40 portfolio returned ~2.1% in August, bringing year-to-date gains to ~11.7%.
Looking Ahead – September 2025
- Seasonality: September is historically the market’s weakest month for returns, often with choppier trading as investors reposition for year-end.
- Fed meeting (Sept 18): Markets are watching for a potential first cut of this cycle.
- Earnings & data: Corporate results, jobs and inflation updates, and back-to-school spending will shape the macro narrative.
- Global watch: Developments in China, Europe, and Japan remain key to risk sentiment.
Takeaway
August underscored the value of diversification, with multiple asset classes contributing to returns. With September’s seasonal headwinds ahead, staying disciplined, diversified, and aligned to a long-term plan remains the right approach.
Disclaimer: Historical performance is not a guarantee of future results. All investments involve risk, and investors should carefully consider their financial situation and goals before making any investment decisions. This content is for informational purposes only and is not intended as investment advice.
Investment Advisor services offered through Compass Advisory Partners, LLC (CAP) and Csenge Advisory Group, LLC (CAG), Registered Investment Advisors, dba Wakefield Venture Group.