At the risk of saying what many of you are probably thinking – “where has the year gone?” It will be September in less than two weeks! With four months left in a very interesting year for investors, I thought it was worth taking stock of where we’ve been and where we may go from here.

As an analyst (Tom Lee of FundStrat) commented this week, this year has seemingly divided itself into three segments from an investors’ perspective.

The first segment was the one many of us would just as soon forget, that being January to mid-April. Those months brought the dawn of a new administration and with it a host of new policies, which culminated in a jarring tariff announcement in early April. Markets reacted swiftly to the downside and US equity markets quickly fell over 20% from recent highs. During this time it was hard to escape the narrative that the US economy and its role in global markets had reached a dangerous tipping point.

Luckily for investors that stayed the course, a second segment quickly began (mid-April to present day). Tom refers to this timeframe as the “most-hated V shaped recovery” in recent memory, and I would have to agree. For investors who exited markets during April (or those who continued to sit on cash), the recovery to fresh all-time highs seems utterly unreasonable and unfair. Even those who have stayed in shake their heads a bit at what has transpired. Just a few months ago, there was vast commentary concerning the end of America’s role in the global economy, runaway inflation from tariffs, and a certain US recession. None of those fears have come to pass and while tariffs have taken effect for many of America’s major trading partners, markets have seemingly accepted them.

This brings us the the third segment – present day to the end of the year. Of course, we don’t know how that segment will play out or if there will be further segmentation when all is said and done. However, looking out to the final four months, here are a few things worth watching

• Rate path in focus– The Federal Reserve has kept rates constant during 2025 in response to the items noted above (most notably concerns over potential inflation from tariff policy). Given recent economic releases (namely July’s jobs and inflation prints), it seems markets believe a rate cut (or multiple rate cuts) will be forthcoming yet in 2025. If that does in fact happen, it will be a tailwind for equity and fixed income prices alike. And if is doesn’t the opposite will likely be true
• Ongoing trade negotiations – A few countries (like China and India) have yet to finalize tariff negotiations with the US. These discussions will continue and once resolved will have meaningful implications given their roles in the US economy
• Data matters – Regardless of what the Administration thinks of the Bureau of Labor Statistics, economic data releases will continue to drive monetary policy decisions. Keep an eye on the releases and the reactions. Will inflation spike? Can the labor market stay strong? Will manufacturing pick up with tariff issues somewhat resolved?
• Volatility remains – Despite a pretty smooth second segment, it’s important to not forget that the potential for volatility remains. Whether it be fiscal policy, monetary policy, new Administration tactics, the start of midterm election positioning, geopolitical concerns, and countless other “what ifs”, volatile days are certainly not behind us

In four months, I’ll likely write a recap of the year. I for one can’t wait to see what there is to say about this third segment.

Onward we go,