US Capital Market Insights – Q3 2025

US equity markets advanced in Q3 2025, supported by broad participation across sectors. Technology and communication services led gains, while smaller and value stocks also rebounded as market breadth improved. The Fed’s first rate cut in September and optimism around AI-driven growth underpinned sentiment. The labor market remained resilient but showed signs of cooling, with slower hiring and a slight uptick in the unemployment rate. Inflation eased modestly but stayed above the target. Equities continued its outperformance to fixed income, supported by moderating yields and expectations of further policy easing.