September Market Review

September market review

Despite inflation remaining a concern, the Federal Reserve (Fed) cut
interest rates in response to weakening jobs numbers, allowing small-cap equity
performance to lead a month that was generally positive across sectors, cap
sizes and asset classes. Small caps tend to be more reactive to short-term rate
fluctuations, and the market is accounting for several rate cuts by the end of
2026, which might reflect exuberance beyond the Fed’s cautious approach and our
view of two more rate cuts in 2025 and one in 2026.

The full effects of tariffs still loom, with front-loading tactics
helping companies weather the uncertainty as they drew upon existing
inventories, but those strategies can only delay the inevitable for so long.
The long-term cost of tariffs may begin to show during Q3 earnings season.

“We’re cautious in the near term. Markets need to digest recent gains.
However, our longer-term outlook is constructive,” says Raymond James Chief
Investment Officer Larry Adam.

Gold hit another all-time high in September alongside strong
performance by other precious metals like platinum and silver, but domestic
mining for industrial metals was flat, thanks in part to slowing demand from
China.

The
bottom line

With
interest rates on the decline and more cuts expected on the horizon to combat
labor stresses, potential for continued economic growth hangs on. The economy
and consumer spending remains resilient despite uncertainty, leading to a
positive outlook for equities over the next year.

Pendle Hill
Advisors is proud to contribute to the Montgomery County News with our weekly
curated financial news and topics. If you have any questions about the markets,
your financial plan, or anything, please feel free to reach out to our office
for a no cost initial consultation.

Kent Pendleton, AAMS®

Financial Advisor, RJFS

Pendle Hill Advisors LLC

14375 Liberty St, Ste 109 | Montgomery,
TX 77356

T 936-297-8267

Kent.Pendleton@raymondjames.com | www.raymondjames.com/pendlehilladvisors

Material
created by Raymond James for use by its advisors. Securities offered
through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment
advisory services are offered through Raymond James Financial Services
Advisors, Inc. Pendle Hill Advisors is not registered broker dealers and is
independent of Raymond James Financial Services.

Investing
involves risk, and investors may incur a profit or a loss. All expressions of
opinion reflect the judgment of the Raymond James Chief Investment Officer and
are subject to change. There is no assurance the trends mentioned will continue
or that the forecasts discussed will be realized. Past performance may not be
indicative of future results. Economic and market conditions are subject to
change. Diversification does not guarantee a profit nor protect against loss.