September is often remembered as a tricky month for markets — but this year told a different story. The S&P 500 advanced 3.64% in September, extending the bull market’s momentum, while fixed income also posted modest gains for the month of September on expectations of further Fed rate cuts

Yet under the surface, the macro data painted a more nuanced picture:

• Inflation risks remain sticky. CPI, reported on 9/11/25, rose 0.4% month-over-month, its largest jump since January, driven in part by tariffs.
• Jobs growth is weakening. Private Payrolls for September, as reported on 10/1/25, badly missed expectations as August figures were revised sharply downwards, reinforcing concerns that the labor market is slowing.
• The Fed is walking a tightrope. Chair Powell announced a 25 bps cut on 9/17/25 and signaled more to come, attempting to support growth without stoking inflation.

Amid this push-pull between inflation and employment, leadership in equities has been highly concentrated. AI-driven companies surged on strong earnings and landmark partnerships — fueling technology and semiconductor strength. At the same time, small caps showed relative momentum, suggesting broader participation may be emerging thanks in part to the aforementioned Fed rate cuts.

What This Means for Advisors

For financial advisors, we believe the challenge is balancing potential opportunity with potential risk:

• How do you capture possible upside from AI and growth while attempting to protect clients if stagflation risks materialize?
• How do you attempt to maintain alignment with client objectives when markets are being driven by a handful of sectors?
• How do you test allocations not just against trailing returns, but against potential shocks like inflation spikes or labor market deterioration?

This is where we believe that our Portfolio Optimizer can make a tangible difference.

Leveraging the Portfolio Optimizer

Our optimizer (integrated with Nitrogen) may provide advisors with the ability to:

• Customize allocations dynamically — Adjust sector caps, security inclusions/exclusions, or cash levels to fine-tune exposures for today’s environment
• Set optimization goals — Whether your client seeks to minimize volatility, maximized risk-adjusted return, or a simple equal-weight rebalance, you can choose from nine different optimization objectives.
• Test across scenarios — Run portfolios through time-period back tests or stress-test against historical events to see how allocations might perform if conditions shift.
• Align with client risk scores — Integrate Nitrogen’s risk analytics directly, ensuring the optimized portfolio stays in line with the client’s risk tolerance.

For users of 3rd party models, our optimizer also blends models together to allow you to build portfolios of portfolios in an attempt to help maximize diversity or risk adjusted return, potentially helping advisors scale consistent strategies across many clients while keeping portfolios resilient.

The Bottom Line

September reminded us that markets can be simultaneously strong and fragile — with tech leading the charge but macro headwinds still lurking. In times like these, we believe process and tools matter as much as market direction.

We believe our portfolio optimizer empowers advisors to stay proactive: attempting to capture upside while guarding against risks from inflation, rate shifts, or labor market weakness. In our opinion, it transforms what could feel like “chasing the market” into a structured, evidence-based approach that may enhance both performance potential and client confidence.

Disclosure

The S&P 500 is a stock market index weighted by market capitalization that is made up of 500 of the largest public companies in the United States.
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