Quarterly Market Update | 30 September 2025
Global equities extended their advance in the third quarter, with major indices – including the S&P 500, Nasdaq and our local ASX – reaching new record highs. As investors appear largely indifferent to ongoing geopolitical tensions, a slowing US economy, and warnings of irrational valuations, perhaps the best way to sum up the quarter is simply: stay calm and carry on.
Despite ongoing geopolitical tensions – war in Ukraine, cease fire in Gaza, and China’s increasing assertiveness around Taiwan – markets appear unfazed. In the United States, rising prices, slowing growth, and a weakening labour market haven’t rattled investors either. Even the recent US government shutdown – the first in seven years – has barely registered in market movements.
So, what could possibly go wrong?
During the quarter, the US Federal Reserve cut interest rates by 25 basis points, a move widely anticipated by the market. However, the Fed also noted a renewed uptick in inflation, reviving concerns about the dreaded stagflation – that unpleasant mix of high inflation and low growth.
Despite these warning signs, markets remain buoyant. As John Maynard Keynes famously observed, “The market can stay irrational longer than you can stay solvent.” In other words, financial markets can ignore rational behaviour for extended periods – and that seems to be exactly what they’re doing.
