Markets Surge in 2025, Tech Giants Lead, but Volatility Looms
Markets have been buoyant this year, with large-cap growth funds, led by tech giants like Nvidia and Meta, surging 15.2%. Meanwhile, large-cap value funds have gained 12.9%. International stocks have outperformed their U.S. peers, climbing 17% year-to-date in the stock market today.
The positive momentum can be attributed to several factors. Markets have shrugged off tariff concerns, with falling interest rates and resilient corporate earnings adding fuel to the rally. Funds are on track for a third consecutive year of double-digit gains, although the pace is slower than the 17.4% in 2023 and 21% in 2022 in the stock market.
Adam Turnquist, Chief Technical Strategist at LPL Financial, warns that October could bring market turbulence due to elevated valuations and stocks trading at record highs in the stock market. Earnings strength, rate cuts, and enthusiasm about AI growth have been the primary catalysts for market gains. Despite net withdrawals of $345.6 billion from U.S. stock funds in Q3, international-stock funds attracted $27.8 billion, and bond funds took in $213.8 billion in the stock market today. Morgan Stanley's Institutional Growth Portfolio led the pack with a 72.4% return over 12 months, followed by Morgan Stanley Insight at 70.2%.
While markets have enjoyed a strong run, investors should brace for potential volatility in the coming months in the stock market today. Despite this, international stocks and bond funds continue to attract capital, indicating a diversified investment approach.
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