Skip to main content

TD Wealth Market Insights: August 2025 Snapshot

Source: Morningstar, TD Wealth Chief Investment Office. Indices used include the Bloomberg US Treasury TR Index, Bloomberg US Aggregate Bond TR Index, Bloomberg US Corp Bond TR Index, Bloomberg US Treasury US TIPS TR Index, Bloomberg Municipal TR Index, Bloomberg US MBS Float Adjusted TR, ICE BofA US High Yield Constrained TR Index, S&P 500 TR Index, Russell 1000 TR Index, Russell 1000 Growth TR Index, Russell 1000 Value TR Index, Russell 2000 TR Index, MSCI EAFE NR Index, and the MSCI EM NR Index, LMBA Gold Price PM, WTexas Crude Int Oil BL. All performance is in U.S. dollars. Past performance is not indicative of future results. The indices are a tool to compare the performance of one or more indices. The volatility and performance of the indices may be greater than or less than the volatility and performance of actual investments. Indices reflect the reinvestment of dividends and income. Indices do not have fees, expenses or taxes, which would lower performance. Indices are unmanaged and not available for direct investment.

Monthly Market Brief Commentary – August 2025

  • 1

    Another Month, Another All-Time High: Major equity indices moved broadly higher in August with the S&P 500 Index of U.S. large-cap companies recording its fourth straight monthly gain and another fresh all-time high. Strength across industry sectors benefited diversified investors as health care and materials outpaced information technology and lifted monthly performance. Exposure to small-cap domestic and international equities were also additive as these areas of the market bounced back from a period of earlier weakness. Fixed income indices also shifted higher. While the Bloomberg Aggregate Bond Index was positive, Treasuries reflected an evolving macro backdrop with a steepening of the yield curve. While near-term uncertainty may challenge the pace of recent gains, we continue to believe investors are well served by focusing on a thoughtful and long-term financial plan.

     

  • 2

    Cue the Cuts: The jobs picture shifted suddenly in August. Non-farm payrolls came in well below expectations and previous monthly gains were revised meaningfully lower, with the pace of growth challenging what may be required to hold the unemployment rate steady. While the Federal Open Market Committee next meets in mid-September, Chair Powell has already suggested a change in position. In his speech at Jackson Hole, Powell acknowledged the downside risks to employment are rising, tipping the balance of the Federal Reserve's mandate toward maximum employment and outweighing the risk of persistent inflation. Although the next payroll update will be closely watched, the market has come around to our view that interest rate cuts are likely on the agenda for September.

     

  • 3

    Exceptional Earnings: With 2Q earnings season wrapping up, S&P 500 companies have reported double-digit earnings growth for the third straight quarter. Led by technology gains, the overall growth rate of nearly 12% year/year compared favorably with the modest 4.8% expected at the beginning of the season. Despite heightened trade and tariff uncertainty this year, corporations have so far demonstrated the ability to offset increased costs, with initiatives to help mitigate price pressures being well received by investors. While consumers have continued to spend, there was also evidence of trading down to lower-priced options.

     

 TD Wealth Asset Allocation Views – September 2025

  • Equity – Modest Overweight

    • Global equity markets are up year-to-date as some progress was made on tariff negotiations and key earnings trends remain intact.
    • We remain overweight equities; while there could be bouts of volatility, government policy is increasingly pro-business, central banks are accommodative, and earnings growth remains positive.

  • Fixed Income – Modest Underweight

    • With the Federal Reserve (Fed) on hold while it awaits further data, yields remain elevated and near multi-decade highs.
    • The Fed has a lot of room to ease policy in response to macroeconomic or political uncertainties, so we expect that bonds will continue to provide stable income and preserve capital.   

  • Cash & Equivalents - Neutral

    • Recent economic trends suggest an increasing chance of transitory below trend growth.
    • Considering this, cash can help to enhance liquidity and provide optionality to capitalize on better valuation opportunities that may emerge. Cash rates are expected to ease as short-term rates fall, but declines should be gradual.

INVESTMENTS, SECURITIES AND ANNUITIES

NOT A DEPOSIT

NOT FDIC-INSURED

NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

NOT GUARANTEED BY THE BANK

MAY GO DOWN IN VALUE

TD Economics Key Financial Forecasts

TD Wealth® is a business of TD Bank N.A., member FDIC (TD Bank). TD Wealth ® provides its clients access to bank and non-bank products and services. Banking, lending, investment and trust services are available through TD Bank. Securities and investment advisory services are available through TD Private Client Wealth LLC, a US Securities and Exchange Commission registered investment adviser and broker-dealer and member FINRA/SIPC (TDPCW). Epoch Investment Partners, Inc. (Epoch) is a US Securities and Exchange Commission registered investment adviser that provides investment management services to TD Wealth. TD Bank, TDPCW and Epoch are affiliates. 

The information contained is believed to be reliable, but its accuracy or completeness is not guaranteed. This is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions. 

Graphs and charts are used for illustrative purposes only and do not reflect future values or future performance of any security, strategy, or investment product. Please read any prospectus or offering materials carefully before investing. 

Investing is risky and may lead to losses of principal. 

Diversification does not guarantee a profit or protect against a loss. 

This information does not provide individual financial, legal, tax, trading or investment advice. TD Bank and its affiliates do not provide legal, tax or account advice. 

This material contains general advice and recommendations of TD Wealth ®, but not necessarily those of TD Bank and its affiliates and related entities, and such opinions are subject to change without notice. 

Forward Looking Statements  

Certain statements in this document may contain forward-looking statements (“FLS”) that are predictive in nature and may include words such as “expects”, “anticipates”, “intends”, “believes”, “estimates” and similar forward-looking expressions or negative versions thereof. FLS are based on current expectations and projections about future general economic, political and relevant market factors, such as interest and foreign exchange rates, equity and capital markets, and the general business environment, assuming no changes to tax or other laws or government regulation or catastrophic events. Expectations and projections about future events are inherently subject to risks and uncertainties, which may be unforeseeable and may be incorrect in the future. FLS are not guarantees of future performance. Actual events could differ materially from those expressed or implied in any FLS. A number of important factors including those factors set out above can contribute to these digressions. You should avoid placing any reliance on FLS. We may not update any FLS. The indices are a tool to compare the performance of one or more indices. The volatility and performance of the indices may be greater than or less than the volatility and performance of actual investments. Indices reflect the reinvestment of dividends and income. Indices do not have fees, expenses or taxes, which would lower performance. Indices are unmanaged and not available for direct investment.

Investment Risks.

Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved. Past performance is not guarantee of future results. Asset allocation/diversification does not guarantee a profit or protect against a loss. 

Equities may decline in value due to both real and perceived general market, economic industry conditions, and individual issuer factors. Investing involves market risk, including possible loss of principal, and there is no guarantee that investment objectives will be achieved. Past performance is not guarantee of future results. Asset allocation/diversification does not guarantee a profit or protect against a loss.  

Bonds are affected by a number of risks, including fluctuations in interest rates, credit risk, prepayment risk, and inflation risk. Corporate debt securities are subject to the risk of the issuer’s inability to meet principal and interest payments on the obligation and may also be subject to price volatility due to factors such as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity. High yield, lower-rated securities are subject to additional risks such as increased risk of default and greater volatility because of the lower credit quality of the issues. Interest on municipal bonds is generally exempt from federal tax. However, some bonds may be subject to the alternative minimum tax and/or state or local taxes. 

International investing may not be suitable for every investor and is subject to additional risks, including currency fluctuations, political factors, withholding, lack of liquidity, absence of adequate financial information, and exchange control restrictions impacting foreign issuers. These risks may be magnified in emerging markets. 

TD Bank and its affiliates and related entities provide services only to qualified institutions and investors. This material is not an offer to any person in any jurisdiction where unlawful or unauthorized. No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission. 

Bloomberg and Bloomberg.com are trademarks and service marks of Bloomberg Finance L.P., a Delaware limited partnership, or its subsidiaries. All rights reserved. FactSet is a registered trademark of FactSet Research Systems Inc. All rights reserved. Morningstar is a registered trademark of Morningstar Research Inc. All rights reserved. All trademarks are the property of their respective owners. The Federal Reserve Bank of Chicago is one of twelve Federal Reserve Banks that, along with the Federal Reserve Board of Governors, make up the Federal Reserve System, the United States' central bank. 

The TD logo and other trade-marks are the property of The Toronto-Dominion Bank or a wholly owned subsidiary, in Canada and/or other countries. 

©2025, TD Bank, N.A

Have a question? Find answers here

Popular Questions