Surprising Markets and Implications on Retirement Confidence
What a remarkable year 2025 has been so far. We began the year anticipating a market pullback, yet both U.S. and international stocks have defied expectations, continuing their climb to all-time highs. Investors experienced a brief jolt in April when the S&P 500 dipped by 10%, but the market has since surged steadily upward.
Nothing seems to derail this stock market, not Trump tariff announcements, not inflation fears, not political events. Instead, investors appear focused on the prospect of Federal Reserve rate cuts, anticipated as soon as this week. Current expectations point to a 0.25%–0.50% reduction, but how stocks will respond remains uncertain. It’s possible that these cuts are already priced into the market, which could result in little reaction—or even a short-term pullback.
For now, investors can celebrate a surprisingly outstanding year in stocks and bonds. The S&P 500 is up about 13% year-to-date, and bonds, as measured by the Bloomberg Agg index, are up 6.4% year-to-date (gold and international stocks up even more!).
This surge in the markets has contributed to growing retirement confidence. According to the 2025 BlackRock Read on Retirement® survey, overall retirement confidence rose by 23% over the past decade, with the most significant gains seen among Gen Z and Millennial investors.
While it’s encouraging to see growing retirement confidence, true confidence comes from having a disciplined investment strategy and a strong commitment to your long-term plan. As the chart above illustrates, confidence often ebbs and flows with market volatility. Avoiding emotional reactions and staying focused on the bigger picture can help prevent this whipsaw effect and protect your sense of security over time. Ensuring your portfolio is well-diversified and rebalanced consistently is a key part of that discipline.
While it’s impossible to predict whether the stock market will decline later this year or in 2026, the likelihood of some level of pullback is high. Your portfolio is in a strong position today, making this a great moment to step back, review your comfort level with risk, and confirm that you’re prepared to stay the course during the inevitable market pullbacks ahead.
A well-diversified portfolio is like a well-built home—it weathers storms because it’s built with a strong foundation.
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