Understanding market performance is essential for strategic philanthropic planning. Whether you’re managing assets in a Donor Advised Fund, planning your year-end charitable contributions, or evaluating the best time to make appreciated asset donations, this market outlook for donors provides the context you need to make informed giving decisions.
AMCF is pleased to share this quarterly market analysis from our partners at Turner Financial Group, Inc. Led by Chief Investment Officer Andrew Tang, Turner Financial Group provides expert guidance that helps donors optimize their charitable impact through strategic asset management and timing.
[PARTNER CONTENT: The analysis below is provided by Andrew Tang, CIO of Turner Financial Group, Inc., an AMCF partner organization.]
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Q3 2025 Economic and Market Review: Steady Expansion & Recovery
Key Indices in Q3 2025
The third quarter of 2025 delivered broad-based gains across both equities and fixed income as markets continued to price in a soft landing for the U.S. economy. Investor sentiment strengthened through the summer months, bolstered by moderating inflation data and growing confidence that the Federal Reserve’s tightening cycle had ended.
• The S&P 500 rose approximately 8% for the quarter, driven by strong performance from large-cap technology and AI-related companies¹.
• The Dow Jones Industrial Average gained about 6%, reflecting renewed optimism in industrial and financial names².
• The Nasdaq Composite once again led all major indices, surging nearly 10% on the back of robust semiconductor demand and sustained enthusiasm for artificial intelligence infrastructure³.
• Small-cap equities also staged a significant rebound, with the Russell 2000 advancing roughly 12% after several quarters of underperformance. Investors rotated into smaller companies on expectations of lower interest rates and improved domestic growth⁴.
• Meanwhile, fixed income investors enjoyed positive returns as the Bloomberg U.S. Aggregate Bond Index climbed around 2%. Long-term Treasury yields eased from their summer highs, steepening the curve slightly as markets began to anticipate a more accommodative monetary policy stance heading into 2026⁵.
Overall, Q3 2025 marked one of the most balanced quarters of the year, with both equity and bond markets benefiting from shifting policy expectations and resilient corporate earnings.
Economic and Market Summary
The U.S. economy continued to show steady expansion in the third quarter, though the composition of growth revealed a divergence between corporate strength and consumer caution. Business investment remained robust (particularly in digital infrastructure, robotics, and renewable energy) while household spending showed signs of fatigue. Consumers have been weighed down by elevated prices and slower wage gains, keeping confidence indicators at multi-year lows despite a strong labor market⁶.
Conversely, investor sentiment remained upbeat as innovation and capital investment powered the next phase of expansion⁷. Artificial intelligence, automation, and data center development continued to underpin productivity growth, offsetting some of the drag from softer retail demand. Corporate America appears to be adapting well to higher borrowing costs, reallocating resources toward efficiency and technology adoption. This divergence (between cautious consumers and confident investors) defines much of today’s economic landscape.
On the international front, global growth remained uneven. Industrial activity in Europe continued to be constrained by restrictive monetary conditions, whereas several Asian economies benefited from a rebound in exports and sustained investment in advanced technologies⁸. The United States remains the principal engine of global expansion, underpinned by resilient corporate profitability, deep and accessible capital markets, and a uniquely robust innovation ecosystem.
A.I. Investment Outlook
The rapid advancement of artificial intelligence and accelerated computing remained a defining theme of the quarter. While some observers have raised concerns that valuations in the artificial intelligence sector may be approaching bubble levels, leading industry executives have dismissed this characterization. Nvidia CEO Jensen Huang reaffirmed that the ongoing buildout of artificial intelligence infrastructure represents a fundamental shift from general purpose computing to accelerated computing, a transformation expected to unfold over multiple years⁹.
Huang highlighted that demand for artificial intelligence chips continues to surpass projections, with Nvidia consistently working to expand production capacity. In contrast to prior periods of speculative excess, the current phase of investment is underpinned by strong enterprise demand across sectors such as healthcare, energy, finance, and logistics. Companies are allocating significant resources to modernize operations, implement generative artificial intelligence solutions, and manage data at scale. Although funding momentum may moderate at times, the long-term structural trend remains intact. Artificial intelligence–related capital spending has become a core element of the global economic landscape rather than a temporary cycle.
Federal Reserve and Interest Rates
Minutes from the Federal Reserve’s September meeting confirmed what markets had already priced in: the Fed is preparing for multiple rate cuts into year-end. Officials signaled the potential for two to three reductions in 2025, with another likely in early 2026, contingent on continued progress toward the 2% inflation target¹⁰. The central bank’s tone shifted noticeably from caution to confidence, reflecting its belief that the disinflation process is well underway.
The easing bias has been welcomed by investors, particularly after two years of restrictive policy. Lower borrowing costs are expected to support housing activity, corporate investment, and consumer spending as the economy transitions to a slower but more sustainable growth pace. While the Fed continues to monitor wage pressures and geopolitical risks, the broad consensus is that monetary conditions are shifting in favor of risk assets. Equities, credit, and real assets all stand to benefit from a more accommodative stance, provided inflation remains contained.
Outlook and Positioning
Looking ahead, the United States continues to hold a commanding lead in technology innovation, research, and capital markets. China remains a strong competitor in applied manufacturing and AI adoption, but the U.S. retains a decisive advantage in intellectual property and entrepreneurial depth. Combined with the expected path of lower rates, this dynamic provides a supportive backdrop for corporate earnings surprises heading into 2026.
Turner Financial Group continues to emphasize sectors positioned for long-term innovation and productivity growth. We remain overweight in technology, energy, utilities, and financials, areas expected to benefit from declining interest rates and sustained capital investment. Our outlook on real estate, precious metals, healthcare, and industrials remains neutral, as these sectors balance moderate valuations against cyclical headwinds. In contrast, we maintain a lower allocation to consumer cyclicals and defensive sectors, reflecting pressures on parts of the workforce and discretionary spending.
In summary, Q3 2025 underscored the resilience of the U.S. economy, the adaptability of businesses, and the enduring power of innovation. The path ahead may feature volatility, but the underlying trend remains constructive. We believe the U.S. is entering a period of steady, innovation-led expansion, one that could define the latter half of the decade.
Andrew Tang
Chief Investment Officer
Turner Financial Group, Inc.
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What This Market Outlook Means for Donors
For AMCF donors and philanthropists, this positive market outlook for donors presents several strategic opportunities:
Appreciated Assets: With equity markets up significantly in Q3, donors holding appreciated stocks may find this an optimal time to contribute to their Donor Advised Funds, maximizing tax benefits while supporting their charitable missions.
Year-End Planning: The Fed’s accommodative stance and continued market strength suggest favorable conditions for year-end charitable giving strategies, particularly for those considering multi-year pledges or endowment contributions.
Long-Term Impact: As Andrew Tang notes, we’re entering a period of “steady, innovation-led expansion” — ideal conditions for donors to think strategically about long-term philanthropic investments that can grow alongside market performance.
AMCF partners with financial advisors like Turner Financial Group to help donors navigate the intersection of investment strategy and charitable impact. If you have questions about how current market conditions affect your giving strategy, we’re here to help.
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REFERENCES
1. S&P Global – S&P 500 Index, Feb 28 to June 30, 2025
2. FRED – Dow Jones Industrial Average, Feb 28 to June 30, 2025
3. Nasdaq, Inc., Nasdaq Index, September 30, 2025
4. Royce, 3Q25 Small-Cap Recap, October 1, 2025
5. Diamond Hill, Q3 Bond Market Review, October 14, 2025
6. Reuters, US consumer confidence weakens in September on labor market worries, September 30, 2025
7. Fortune, Spending on AI data centers is so massive that it’s taken a bigger chunk of GDP growth, August 6, 2025
8. EY Parthenon, Global economic outlook – Slowdown amid uncertainty, page 2, June 23, 2025
9. Nvidia Blog, Nvidia CEO Envisions AI Infrastructure Industry Worth ‘Trillions of Dollars’, May 18, 2025
10. Federal Reserve FOMC, Minutes of Federal Open Market Committee, September 16-17, 2025
DISCLOSURE
Advisory services provided by Turner Financial Group, Inc., an Investment Adviser registered with the Securities and Exchange Commission (SEC).
The material contained herein is intended as a general market commentary, solely for informational purposes and is not intended to make an offer or solicitation for the sale or purchase of any securities. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. This information is not intended as a specific offer of investment services by Turner Financial Group, Inc. Turner Financial Group, Inc., and its affiliates do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Any hyperlinks in this document that connect to Web Sites maintained by third parties are provided for convenience only. Turner Financial Group, Inc. has not verified the accuracy of any information contained within the links and the provision of such links does not constitute a recommendation or endorsement of the company or the content by Turner Financial Group, Inc. The prices/quotes/statistics referenced herein have been obtained from sources verified to be reliable for their accuracy or completeness and may be subject to change.
Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and strategies described herein may not be suitable for all investors. To the extent referenced herein, real estate, hedge funds, and other private investments can present significant risks, including loss of the original amount invested. All indexes are unmanaged, and an individual cannot invest directly in an index. Index returns do not include fees or expenses. Speak to your finance and/or tax professional prior to investing.
Turner Financial Group, Inc. is an Investment Adviser registered with the United States, Securities Exchange Commission, however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Additional information about Turner Financial Group, Inc. is also available at www.adviserinfo.sec.gov. Advisory services are only offered to clients or prospective clients where Turner Financial Group, Inc. and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Turner Financial Group, Inc. unless a client service agreement is in place.