After a turbulent first four months of 2025, North American stock markets staged an incredible recovery to close out the first half of the year. A calm settled over both asset prices and investors as the heightened volatility waned. This tranquility not only continued through the end of the third quarter but became even more pronounced.

It's difficult to imagine a greater range of emotions than what investors experienced over the prior three-month period. The beginning and end of the second quarter couldn't have been more different. In early April, the S&P 500 was down over 20% from its February all-time high amid an escalating trade war that threatened to upend the global economy.

The first quarter of 2025 was a transitional period for the financial markets, the U.S. economy, and the world at large. President Trump's inauguration in January ushered in a new era, one widely expected to mark drastic changes even compared to his first term. Just like in 2016, there appeared to be a "Trump Bump" in the stock market and many "soft" indicators such as Consumer Confidence and Small Business Optimism immediately after the president's November election win. However, unlike eight years ago, the honeymoon period did not last long.