This article first appeared on GuruFocus.
Wall Street just wrapped its best third quarter since 2020, with the S&P 500 (SP500) and tech-heavy Nasdaq (IND) racing higher while the Dow Jones (DJI) finished at a record.
The rally picked up steam all quarter as markets stayed unusually calm. Volatility was muted, corporate earnings held up better than feared, and investors kept piling into the AI story. Big Tech once again carried the load the Nasdaq climbed 12.2%, the Dow gained 4.3%, and the Nasdaq 100 rose nearly 10%, lifted by Apple (NASDAQ:AAPL) +22.5% and Nvidia (NASDAQ:NVDA) +21.2%.
The S&P 500 added almost 8%, notching 23 record highs one of its busiest runs ever. Sector winners were led by Technology (XLK) +12.3%, Communications (XLC) +9.8%, and Consumer Discretionary (XLY) +9.8%. Staples (XLP) were the clear laggard, down 4.4%.
On the stock level, AppLovin (APP) more than doubled, Western Digital (NASDAQ:WDC) surged 88%, and Warner Bros. Discovery (NASDAQ:WBD) jumped 78%. On the flip side, Molina Healthcare (NYSE:MOH), Centene (NYSE:CNC), and FactSet (NYSE:FDS) all sank more than 35%.
Looking ahead, the question is whether this calm can last. A possible government shutdown, sticky inflation, or cooling AI enthusiasm could put Q4 optimism to the test.