U.S. equity markets continued to advance in the third quarter, with the S&P 500® Index returning 2.3% and bringing year-to-date gains to 12.73%. Despite renewed geopolitical tensions, rising oil prices, and the Federal Reserve’s September interest rate hike, strong corporate earnings helped support equity performance. Earnings growth continued to broaden beyond the largest technology companies, while AI-related investments remained a significant driver of economic activity. Looking ahead, we examine the opportunities and risks surrounding the massive wave of AI spending, the potential impact of the upcoming midterm elections, and why strong corporate fundamentals remain central to the market outlook.
