Stocks End Quarter with Modest Gains Amid Mixed Sector Action

The stock market wrapped up the month and the quarter on a steady note, with the S&P 500 (+0.3%), Nasdaq Composite (+0.1%), and Dow Jones Industrial Average (+0.1%) all closing near session highs after a choppy day of trading. Gains were modest but enough to extend what has been a surprisingly strong September.

Healthcare stocks stole the spotlight after President Trump announced that Pfizer will cut U.S. drug prices and sell some products through a new government-run direct-to-consumer site, TrumpRx. The news sent Pfizer surging nearly 7%, while Eli Lilly gained close to 5% on reports it is in talks to join the initiative. Merck, Amgen, and other large-cap peers followed higher, helping the healthcare sector soar 2.5% and finally claw its way into positive territory for the year.

Tech also provided a meaningful lift. The sector climbed 0.9% on the day and finished the quarter as the S&P 500’s top performer, up 13% over the past three months. NVIDIA hit another record high, while the PHLX Semiconductor Index capped a strong September with a 12.3% gain.

Not every sector joined the rally. Consumer discretionary and communication services posted modest declines, while energy was the weakest link yet again, falling 1.1% as crude oil slid nearly 2% to settle at $62.37 a barrel. Financials also closed in the red.

Smaller-cap names lagged behind, with the Russell 2000 and S&P Mid Cap 400 barely eking out gains, even as weaker consumer confidence bolstered expectations for more rate cuts ahead. The Conference Board’s index slipped to 94.2 in September, and Fed funds futures now price in near-certainty of cuts in both October and December.

Fed officials offered mixed messages, balancing concerns about inflation against signs of a cooling labor market. Meanwhile, the looming government shutdown has yet to unsettle markets, but it threatens to disrupt the release of key economic data in the coming weeks.

Despite the uncertainties, September delivered strong returns: the S&P 500 gained 3.5% for the month, the Nasdaq surged 5.6%, and the Dow rose 1.9%. Investors now turn the page to the fourth quarter with monetary policy easing expectations and sector rotation setting the tone.

Our FTInvest 11 model portfolio spent much of the day in negative territory, but close to its flatline, unable to build meaningful momentum after yesterday’s volatility. By the closing bell, the index slipped a modest 0.03%, settling at 851.12.

While today’s decline was negligible in absolute terms, the index still showed signs of hesitation, with market participants reluctant to push further in either direction. Weakness in select components was largely offset by resilience elsewhere, leaving the overall move muted.

The close near the session’s midpoint reflects a market in wait-and-see mode, with investors digesting recent highs while weighing the next catalyst. Despite the fractional retreat, FTinvest 11 continues to trade within striking distance of record territory, underscoring the portfolio’s underlying strength.