While the economic backdrop and market fundamentals remain supportive, there are real risks for investors to monitor in the months ahead. Domestically, the most pressing risk is political, as the uncertainty surrounding the November elections may contribute to some short-term volatility toward
year-end.

The primary concern is the potential for notably slower growth ahead. While this is not the base case at this time, a potential slowdown in economic activity heading into 2025 would likely rattle markets at the start of the year. Given the recent slowdown in hiring in October, the labor market will be key to monitor in the months ahead.

Foreign risks also remain that should be acknowledged. The ongoing wars in Ukraine and the Middle East continue to serve as sources of geopolitical uncertainty. The slowdown in China and the Chinese government’s attempts to stimulate its economy and markets have the potential to impact global investors. While the direct market effect from these foreign risks has largely been muted in the U.S., there’s a lot going on internationally that we should continue to keep an eye on.

The Takeaway

• Political risks and the potential for further economic slowdown remain top of mind.
• International risks should be acknowledged as well.