Today, we’re taking a look at some of the stats behind the market’s moves in the third quarter this year — a much calmer period than the previous three months.
1. The Market Makes a Modest Move
The S&P 500 rose 2% in the third quarter, reaching a gain of 11.8% for the year so far. The quarter’s low point came on July 29, when the index fell 1.5% after the Fed held rates steady and moves in the bond market suggested investors thought the central bank was falling behind in addressing inflation.
The index rebounded 1.7% the next day, when Microsoft (MSFT +2.38%) jumped 16% after its strong earnings report. On Aug. 4, the index rose another 1.8% to a record close as oil prices eased, but the market moved mostly sideways for the rest of the quarter, responding to rising bond yields, higher oil prices, and Fed signals of further rate increases.
2. More Losers Than Winners
Within the market’s small gain, the majority of companies within the S&P 500 lost ground — a function of its market-cap weighting where just 10 companies comprise 39% of the index and the 20 largest companies account for more than 50%. By contrast, the Invesco S&P 500 Equal Weight ETF (RSP +0.55%) lost 2.2% in the quarter.
- The quarter’s biggest winner was Moderna (MRNA +14.21%), which gained 177% on Aug. 19 alone after it and Merck (MRK +2.26%) announced that a Phase 3 trial of their personalized mRNA melanoma therapy, combined with Keytruda, beat Keytruda alone.
- At the opposite end, Fair Isaac (FICO -5.63%) fell more than 25% on Sept. 29 when Fannie Mae and Freddie Mac opened the door to a rival credit score in place of FICO’s monopoly status.
3. Tech vs. the Market
The technology sector overall rose 2.7%, a far cry from its 43% gain last quarter. The energy sector mirrored this reversal, going from a 13% loss to a 16% gain as oil prices seesawed in the quarter.
4. The Mag 7 (Mostly) Shine
Microsoft made a big move after its July earnings report showed that it is making bigger capital investments while still generating plenty of cash. Meta Platforms (META -0.31%) climbed in September after launching its Muse AI assistant, following a recovery that began when the company paid $18 billion to settle a set of lawsuits claiming its products are intentionally addictive and harmful to children.
5. More Down Days
Despite the index’s overall gain in the quarter, most days ended with the S&P 500 in the red — though with fewer extreme gains or losses than earlier in the year. The best day was a 1.8% gain on Aug. 4, coming soon after the worst, a 1.5% loss on July 29.
6. Today’s Question!
Which stock are you most likely to add to before the end of the year, and which would you trim?
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