Quarterly market outlook - 4th Quarter, 2025
Our investment strategists provide Edward Jones’ perspective on the economy and the markets, and what it may mean for your portfolio.
The Quarterly Market Outlook provides investors with our perspective on recent activity in the capital markets. The Edward Jones Investment Policy Committee offers its viewpoints on the U.S. economy, equities, the bond market, international markets and asset classes, as well as a special topic of interest to investors each quarter.
These aren’t short-term predictions. Rather, this is Edward Jones’ perspective on market and economic topics designed to help you make decisions affecting your long-term financial strategy. As you read through each topic, you'll find specific actions you can discuss with your financial advisor.
Looking back at the third quarter
A supportive economic backdrop drove gains across asset classes, boosting well-diversified portfolios.
Canadian outlook
Trade tensions are clearly hitting the Canadian economy hard, although there are signs of resilience in sectors less exposed to the U.S. This slowdown should persuade the Bank of Canada (BoC) to cut again, while the upcoming budget has the potential to lift short- and long-term growth.
Equity outlook
The Canadian and U.S. equity markets continued to rise in the third quarter of 2025, with the Canadian TSX up about 21% and the S&P 500 up nearly 14% for the year through Q3. However, keep in mind that markets don’t move higher indefinitely, and one to three corrections are the norm in any given year.
Fixed-income outlook
The Bank of Canada (BoC) cut its policy rate in September – its third cut this year – as it likely approaches the end of this easing cycle. The Federal Reserve (Fed) resumed rate cuts for the first time this year to help support the softening U.S. labour market.
International outlook
After a challenging start to the year marked by trade disruptions and heightened uncertainty, global economic activity is beginning to stabilize, and in many regions, accelerate.
AI, the economy and markets
There are early signs of artificial intelligence (AI) affecting economies and labour markets, from growing capital expenditures to shifting employment patterns. While these trends are likely to continue in coming years, the long-term impact of this technology remains unclear and while strong profitability among the leading AI names is reassuring, we must be mindful of lofty expectations.
Strategic asset allocation guidance
Our Strategic Asset Allocation represents our view of balanced diversification for the fixed income and equity portions of a well-diversified portfolio based on our outlook for the economy and markets over the next 30 years.
Quarterly market outlook - Full report from Edward Jones
Download the entire quarterly market outlook report here.
Important information:
This content is provided as general information only and should not be interpreted as specific recommendations or investment advice. Investors should make investment decisions based on their unique investment objectives and financial situation.