Commentary

Third Quarter 2025 Quarterly Market Update

Market summary: Stocks rallied amid policy fluctuations.

By: Fidelity Asset Allocation Research Team

Updated: 7/16/2025

Key Takeaways

Markets: US and global equities rallied in Q2, led by large-cap growth stocks and high-yield bonds, despite policy-driven volatility.
Economy: The US economy remains in expansion, but inflation risks persist due to tariffs and tight labor markets.
Investments: Portfolio managers are modestly overweight risk assets, favoring gold and TIPS to hedge stagflation risks.
Valuations: US stock valuations remain elevated; analysts believe non-US equities and bonds offer more attractive long-term value.

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Third Quarter 2025 Quarterly Market Update

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