Insights in 5: What Shaped Markets in Q3

In the following five-minute video, Simon Bowers, Private Wealth Portfolio Manager with IPC Wealth, discusses the key events that shaped markets during the third quarter and what investors should be watching as the year progresses.

Simon notes that the third quarter delivered a mixed performance for investors. Equity markets posted modest gains, led in part by continued enthusiasm around artificial intelligence, while bond markets faced headwinds amid persistent inflation concerns and elevated interest rates. At the same time, uncertainty surrounding global trade and geopolitics continued to influence market sentiment.

A key theme during the quarter was the impact of U.S. policy decisions on inflation and economic growth. Tariffs remain central to U.S. trade policy and, combined with higher energy and transportation costs, have contributed to rising prices across the economy. Inflation has remained above the levels targeted by central banks, prompting the U.S. Federal Reserve to maintain a restrictive interest-rate environment. While higher rates are intended to slow inflation, they have also increased borrowing costs and added pressure to economic growth.

Despite these challenges, investors should remember that the U.S. stock market is not simply a reflection of the domestic economy. Many of the companies that make up major U.S. indices generate revenue around the world, providing exposure to global economic activity even during periods of slower growth at home.

Outside the United States, governments and businesses are increasingly seeking opportunities to diversify trade relationships and invest in long-term economic infrastructure. In Canada, initiatives aimed at improving productivity, strengthening domestic growth and expanding market access could help support future economic resilience.

Looking ahead, Simon believes markets may remain volatile as investors assess evolving trade policies, geopolitical developments and upcoming political events. While uncertainty can feel uncomfortable, it is a normal part of investing. History has consistently shown that staying invested through periods of market turbulence has been one of the most effective ways to benefit from the long-term growth potential of financial markets.

Investors concerned about short-term volatility should speak with their advisor to ensure their portfolio remains aligned with their goals and time horizon.

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