Goldilocks Returns? Strong Earnings Meet Elevated Risks

DWS’s Q3 2025 CIO View Market Outlook weighs the balance between supportive fundamentals and rising macro risks.

• Global earnings growth of 7–11% p.a. and anticipated Fed rate cuts underpin optimism for equities, with AI leaders continuing to deliver strong momentum.

• Valuations are stretched, with S&P 500 trailing P/E at 24x and index concentration at record highs, raising vulnerability to shocks.

• Geopolitical tensions, elevated government bond yields, and gold’s 33% YTD rally highlight persistent risk aversion.

Can markets sustain their “Goldilocks” momentum, or are we nearing an inflection point? Explore the full outlook for asset allocation guidance.