Overseas, developed markets posted modest gains, constrained by sluggish growth in Europe and Japan. Emerging markets outperformed, buoyed by China’s targeted stimulus and a temporary easing of U.S.-China trade tensions. South Korea stood out, adding to its nearly 100% year-to-date gain. Investor excitement around Samsung Electronics, the country’s largest publicly traded company, played a key role in driving returns.

Bond markets rallied as yields declined, reflecting continued central bank easing. Although the 0.25% rate cut was widely anticipated, hawkish dissent and Chairman Powell’s remarks on the balance of risks caught investors off guard. Futures markets, which had priced in a 94% probability of a December cut before the meeting, dropped to 67% after.

LOOKING AHEAD

Financial media loves a milestone. “S&P Hits Record High!”, “Dow Tops 47,000!”. These headlines grab attention, but they rarely offer insight. Price alone is just a number that tells us what something costs, but not what it is worth. And historically, new highs in price alone have shown little predictive power. They’re psychological markers, not reliable signals. The path forward will remain largely data-dependent which could prove uniquely challenging as many of the agencies responsible for producing the data have halted some efforts during the government shutdown. Additional headwinds to global markets include the lingering impacts of global trade tensions, potential policy missteps by central banks and ongoing geopolitical tensions. Against that backdrop, a healthy dose of cautious optimism is warranted while looking beyond the headline-driven noise to allocate capital.