Q3 2023 in review: Where the market could go from here

September's end marks the final closing bell for the third quarter in 2023. Yahoo Finance's Julie Hyman and Josh Lipton look back at the stock and bond markets' high and lows, highlighting several headline events — like the Fed's monetary policy and rising oil prices — in their quarter-end review.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

This post was written by Luke Carberry Mogan.

Video Transcript

JOSH LIPTON: So wrapping things up, Julie, no shortage of headlines.

I've got oil, UAW.

I've got government shutdown.

We've got rate pressure.

Seasonals were also interesting.

I often, when it comes to seasonals in September, I kind of don't know whether to overplay that.

It always feels like kind of a squishy topic.

And I always feel like, well, if we're talking about it, it's already priced in.

But September, again, proved kind of rough for the bulls.

JULIE HYMAN: We had the worst month of the year thus far for the S&P 500, at least, and for the NASDAQ as well.

There was just sort of this confluence of factors getting close to the end of the rate hike cycle.

We don't seem to know what that is going to mean.

And if you take a look at the YFi Interactive, you can see the downward trajectory we have seen here in the month of September.

Here, you got the Dow over the past three months here.

But if you look at the month and what we have seen, you see that big tumble there in the Dow, the tumble in the S&P 500 nearly 5%, and the NASDAQ also trading lower here.

So all of these seeing some pain.

You were just talking about what we have seen in some other asset classes as well.

And obviously, this month has really been characterized by this increase in yields on the 10-year.

That's been one of the things that has been problematic for stocks.

And then, of course, one of the other things that's been problematic for stocks has been the surge that we've been seeing in oil prices, if I can scroll on down to oil futures-- there they are-- and that big increase above $90 a barrel that we've been seeing.

JOSH LIPTON: Yeah, I mean, rate pressure is front and center, though.

I mean, now with yields, you're really in spitting distance of 5%.

And some think, listen, maybe you go higher on Fed messaging and issuance.

And you can forgive some investors probably think, you know what?

I want to see some stability there before I move in.

JULIE HYMAN: Yeah, that seems to be somewhat of the perception here that we are seeing, but there also is the perception that we don't know, to your point, where yields are going to stabilize.

Are we going to see some support under the bond market, though, with yields at these levels?

That seems to be the perception as well, but I don't know what that means for ceiling for yields, right?

You have the likes of Larry Fink over at BlackRock saying we could see 5%.

You had JP Morgan, Jamie Dimon earlier this week, floating 7% for the Fed funds rate, which doesn't seem like it's happening anytime in the very near future.

So to your point, though, there's a lot of unsteadiness here.

JOSH LIPTON: Yeah, and you know, you also think about, Julie, how many people right now are thinking, you know what?

I can just sit tight here.

I'm OK.

I mean, for the first time in a long time, there are alternatives.

They're looking at T-bills or money market funds.

They're yielding 5%.

There's a lot of people who are thinking, I don't have a lot of motivation to make a big move right now.

I can sit still for a bit.