Q3 2025 Market Reflections: Strategies for Minnesota and Midwest Investors

As fall settles across the Midwest — with harvest season in full swing and the air turning crisp — it’s not just the landscape that’s changing. The financial markets are evolving, too. The third quarter of 2025 has brought steady market growth, a stabilizing economy, and cautious optimism for the months ahead.

For Minnesota and Midwest investors, this is an ideal time to review your portfolio and revisit your goals so that your strategy is positioned for both opportunity and resilience. Brad Connors, CEO of iWealth, recently shared insights about the Q3 2025 financial market trends, offering valuable guidance for investors navigating today’s environment.

Minnesota Market Recap: Steady Growth Across the Board

The third quarter delivered positive results across all major U.S. indices, reflecting an economy that continues to perform despite global uncertainty and regional shifts.

Dow Jones Industrial Average

In his Q3 2025 Market Update video, Brad shared that the Dow Jones Industrial Average (DJIA) gained 2.73% during Q3, bringing its year-to-date return to 9.16%. For investors in traditional sectors — manufacturing, agriculture, and energy — this performance reaffirms the strength of blue-chip companies that remain foundational to Midwest economies.(1)

S&P 500

Brad also shared that the S&P 500 rose 3.6% this quarter, totaling a 14.1% gain for the year. Growth has been led by large-cap technology firms and consumer-focused companies that continue to benefit from innovation and shifting spending habits. Midwest investors, especially those with diversified portfolios, have benefited from this broad-based rally. (2)

Bond Market Rebound

The Bloomberg U.S. Aggregate Bond Index added 1.79% in Q3, pushing its year-to-date performance to 6.43% according to Brad. For Minnesota investors who rely on bonds for income or stability, this recovery is encouraging. After several challenging years due to rising rates, fixed income investments are regaining strength as interest rates begin to level out. (3)

Economic Landscape: Midwest Resilience Meets National Stability

From the Twin Cities to Chicago to Des Moines, the Midwest economy continues to display remarkable resilience. While inflation and costs remain a concern, local industries — including agriculture, healthcare, and manufacturing — have shown adaptability and steady demand.

Consumer Spending Still Strong

Midwestern households continue to spend, even as prices rise modestly. Strong employment and a solid agricultural season have supported local economies. Travel, entertainment, and dining sectors are performing well across Minnesota and neighboring states, reflecting steady consumer confidence.

However, some early signs of financial tightening are appearing: credit usage is increasing, and savings rates are easing. This suggests that spending could moderate through the winter months, but overall, the Midwest economy remains on solid footing.

Interest Rates Begin to Stabilize

After years of rate hikes, interest rates are showing signs of leveling off. For Midwest businesses — especially small and family-owned enterprises — this stability provides room to plan for growth and reinvestment.

For individual investors, steady rates can create opportunities in both the bond and real estate markets. Mortgage rates may start to ease slightly, which could benefit those exploring property investments or refinancing.

Inflation: Moderating but Not Gone

Inflation has cooled from its peak, though some costs — especially in food, fuel, and housing — remain elevated. This is particularly relevant for Midwest communities where agriculture and transportation are key economic drivers.

The good news? The overall inflation trend is moving in the right direction. As energy and supply chain pressures ease, both consumers and businesses in the region are finding more predictability in their budgets.

Why Investors Should Stay Disciplined in Minnesota and Beyond

Strong markets can create confidence — sometimes too much of it. Now more than ever, a disciplined investment approach is essential. Markets are unpredictable, and even in times of growth, planning ahead is the most prudent plan towards a confident future.

Revisit Your Financial Plan

If you’ve had any major life changes recently — such as a job transition, retirement, or a family milestone — now is the time to reassess your financial plan.

For Minnesota investors nearing retirement, this may mean reviewing your income strategy and asset allocation. For younger investors across the Midwest, it could mean increasing retirement contributions or exploring tax-efficient opportunities.

Diversify for Preservation and Growth

The Midwest economy is broad — and your portfolio should be, too. Maintaining a balance across sectors like agriculture, technology, manufacturing, and energy aims to reduce risk. Diversification (4) isn’t just about spreading your investments — it’s a strategy aimed at reducing the risk of one single event or trend derailing your long-term goals.

Partner with an Experienced Adviser

Working with a financial adviser who understands the Midwest market context — from local tax laws to regional economic cycles — can make a big difference. Whether you’re in Minneapolis, Rochester, or Sioux Falls, an iWealth financial advisor who knows your environment can help tailor strategies that reflect both national trends and local realities.

Looking Ahead: Preparing for Q4 2025 and 2026

As we move into the final quarter of 2025, several trends will continue shaping the investment landscape for Midwest and Minnesota investors:

• Moderate Economic Growth – The U.S. economy is expected to maintain steady expansion, with the Midwest benefiting from strong manufacturing output and agricultural exports.
• Interest Rate Stability – With the Federal Reserve signaling a pause in rate hikes, borrowing conditions may improve heading into 2026.
• Corporate Earnings and Innovation – Technology and clean energy sectors remain drivers of growth, offering opportunities for forward-looking investors.
• Seasonal Considerations – The end of the year is an ideal time to work toward optimizing tax strategies, rebalance portfolios, and plan for the next financial year.

Action Steps for Investors

To make the most of the current environment, consider taking these practical steps before year-end:

• Review your investment portfolio for balance and tax efficiency.
• Schedule a planning meeting with your advisor to align your goals for 2026.
• Reassess your emergency fund and liquidity needs for the winter season.
• Evaluate real estate or business opportunities while interest rates are stable.
• Rebalance your mix of growth and income assets to reflect current market trends. (5)

These steps aim to help you enter the new year with confidence in your future and a strategy tailored to your personal needs and regional circumstances.

Final Thoughts: Confidence Through Clarity

The third quarter of 2025 has shown us that steady growth and economic stability can coexist with cautious optimism. For Minnesota and Midwest investors, the message is clear: stay informed, stay disciplined, and stay aligned with your goals.

As Brad reminds us, the best financial outcomes come from proactive planning and consistent review. Whether you’re managing retirement income, growing a family business, or investing for future generations, your financial plan should evolve with your life and both the Minnesota and broader national economy.

Disclosures:
1) https://www.thestreet.com/markets/heres-how-u-s-stocks-did-in-q3-2025

2) S&P 500 Index data, calculations by iWealth.

3) Bloomberg U.S. Aggregate Bond Index, calculations by iWealth

4) There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

5) Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change. References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.