All three major U.S. indices ended January in positive territory, despite volatility driven by geopolitical tensions and uncertainty around the Fed. International stocks outperformed, with developed and emerging markets rising amid concerns about U.S. trade and foreign policy.

December was a mixed month for markets. The Nasdaq ended the month down slightly, while the S&P 500 and Dow Jones saw modest gains. Overall, markets had a strong 2025, with all three major U.S. indices up between 15 and 21 percent for the year. The economy also continued to expand throughout 2025, as shown by the 4.3 percent annualized GDP growth rate in Q3. Consumer spending has remained resilient and helped power the economy throughout the year.

After declines in early November, a late-month rebound brought the S&P 500 and Dow Jones to positive territory, although the technology-heavy Nasdaq ended the month down 1.45 percent. Turning to the economy, a delayed employment report showed a rebound in hiring in September, following modest job losses in August. But the unemployment rate rose to 4.4 percent, marking the highest level since late 2021.

The S&P 500, Dow Jones, and Nasdaq posted positive returns in October, with falling short-term interest rates and strong corporate earnings supporting markets. In fact, the average Q3 earnings growth rate for the S&P 500 stood at nearly 10.7 percent at the end of October, above analysts’ 7.9 percent estimate at the end of September.

September was another positive month for markets, as the S&P 500, Dow, and Nasdaq set new record highs. The international story was similar, with developed and emerging markets gaining for the month. Short-term interest rates also fell in September, as the Fed resumed cutting rates at its mid-month meeting. Markets anticipate one or two additional rate cuts by year-end.

Despite volatility early on, the S&P 500, Dow, and Nasdaq were up low- to mid-single digits for August. These results brought markets to record highs and indicated continued investor demand for U.S. stocks. International stocks also ended the month in positive territory, as risk assets rallied. Even bonds were up, as falling interest rates supported bond prices.

Markets continued to rally in June, capping off a solid quarter for investors. The S&P 500, Dow, and Nasdaq were up for the month and the quarter, supported by the continued cooling of trade war rhetoric. The story was similar internationally, as a solid June contributed to a positive quarter for both developed and emerging market stocks. On the economic front, updates released in June were broadly positive. The May jobs report showed continued solid hiring during the month, and consumer sentiment surged to a four-month high.

Markets rallied in May, with the S&P 500, Dow, and Nasdaq up low- to mid-single digits for the month on solid fundamentals and reduced policy worries. Further, the average earnings growth for the S&P 500 during the first quarter was 13.5 percent, more than twice the initial estimates. The economic updates were also broadly positive. The April job report revealed continued solid hiring, and inflation showed signs of improvement, as consumer prices rose by less than expected.

April saw significant market fluctuations driven by tariff and interest rate concerns, with the Nasdaq showing a small gain while the S&P 500 and Dow Jones finished lower. Internationally, foreign stocks rebounded after initial sharp declines, resulting in positive overall performance for developed and emerging markets. Bond markets also experienced volatility, but the 10-year Treasury yield ended slightly lower, supporting bond prices for the fourth consecutive month. While there was earnings growth for the S&P 500, declining business and consumer sentiment raised concerns about future spending.

March was a tough month for U.S. stocks, as all three major indices were down for the month and quarter. Bonds performed better, as falling interest rates supported prices, and developed and emerging markets both ended the quarter positively. Hiring and inflation also improved, and the solid economic backdrop should keep driving earnings growth. Despite this, we continue to face uncertainty—including tariff concerns and weakening consumer confidence.