While Trump’s tariff policy and the so-called “liberation day” were the dominant themes in Q2, attention in Q3 shifted to the US Federal Reserve and the trajectory of global interest rates. Monetary policy guidance moved toward a more accommodative stance, aiming to support growth rather than
respond to recession risks.

The old saying “sell in May and go away” would have missed a strong summer rally, and investors who stayed the course were rewarded. Q3 2025 delivered positive returns across most major asset classes, supported by:

i. optimism around resilient US economic growth,
ii. persistent AI-driven market enthusiasm, and
iii. solid corporate earnings, though sentiment remained tempered by political and policy uncertainties.

Performance varied by region, with European indices lagging their US peers after significant outperformance in Q1 (i/ the EU defence stimulus plan and German infrastructure programme, and ii/ outflows from the US amid Trump’s unpredictable policies). With EUR/USD broadly flat, performance
was driven mainly by fundamentals. Equity gains remained concentrated in the US tech sector, with the “Mag 7” up around 70%, supported by an increasingly circular and debt-financed AI ecosystem.

With the Fed resuming its cutting cycle in September after almost a year on hold, and amid signs of a softening labour market, fixed income was supported by declining sovereign yields and tighter credit spreads.

Source : JP Morgan