Changing Seasons

There is never a more obvious reminder that the seasons are changing here in the northeast than the cold, crisp autumn air biting at any skin you leave exposed on that walk from the front door to the car. October and November is usually when it really starts to feel like it’s almost closing time on the year.

The 3rd quarter ended with some interesting notes across the markets, some of which can be helpful in measuring what is going on in the markets. Q3 for 2025 was one of the best stock market performances in the last decade (+8.12%), let by the Technology, Communications and Consumer Discretionary sectors. Notably, Technology moved from 5th (of 11) to 2nd amongst other sectors (and now sits in 1st).

The Tech sector currently leads the way in Q4 (+5.9% quarter-to-date (QTD)), with Healthcare (+4.8%) and Consumer Discretionary (+3.3%) rounding out the current top three sectors.

Looking now at the company sizes, we saw small-caps (represented by the Russell 2000 Index) with a strong performance in Q3 of +12.4%, outpacing large-caps (S&P 500, +8.1%) and mid-caps (S&P 400, 5.3%). It’s noteworthy that the Russell 2000 hit a new all-time high in late September for the first time in four years, and has since traveled higher. Q4 has started with small-caps losing some speed, though still in line with the mid- and large-caps so far.

In our screening for investable stocks, we can dig deep enough and find some very attractive investment opportunities by looking inside the strongest sector and strongest sized companies (small-caps), into small-cap tech. Inside of that sub-space, using iShares SmallCap Info Tech ETF (PSCT), we can see its constituents are strong, with some standouts worth looking at further.

If you are a fan of commodities, you might have done well with precious metals like gold and silver over Q3 (+11.7% and +10.5% respectively), and have so far increased those gains in Q4. Precious metals are not always a place where we see these types of returns, though investors seem to like these assets amongst the uncertainty of the US economy and strength of the US dollar.

There’s no telling where the year goes from here. Historically, October can be a bit volatile, which is what we’ve certainly seen already. Though the market is also positive for total return in October 59% of the time, and Q4 is a strong one for momentum investing (which is how we invest here at Granite Wealth Management). We also know that 1-month and 6-month forward returns after a government shutdown are strong: +3.5% and +12.5%.

When it comes to investing through changing market seasons, it’s important to expand your understanding of what the market is doing generally, comparing to how your portfolio is allocated, and work to reconcile the portfolio sensibly to align with the market strengths. It’s a moving target, of course, so be considerate of too-frequent of changes.

If you’re my client and want to chat further about the data, let’s chat! If you’re not yet a client of mine, but want to hear more, send me an email and we can talk further: [email protected]