Macro views

Buckle up for ease

November 19, 2025 - 3 min

Chief Executive Officer, Chief Investment Officer, and Portfolio Manager – Gateway Investment Advisers, LLC

Gateway market perspective

Market volatility experts from Gateway Investment Advisers, specialists in options-based investment strategies, examine key volatility trends each month and risk management ideas to help investors stay invested for the long run.

Buckle up for ease

Based on rate-cut history going back to 1990, equity markets seem to immediately respond positively to the news.
Historically, the S&P 500^® Index has had an initial rally averaging 4.76% over a duration of approximately two months and an average 12-month return of 6.99%.
However, initial rate cuts do not necessarily create rosy market environments nor are they always the panacea of which they appear. Consider seven prior episodes of Fed rate cuts since 1990.
In the year following the initial rate cut, the S&P 500^® Index averaged a drawdown of 19.38%, with an average duration of five-and-a-half months.
Hedged equity strategies delivered on protection during these periods as well. The average drawdown for the BXMSM was 14.02% and the PUTSM was 12.66%.
The average VIX^® high was 46.53 during those drawdowns.

Key takeaways:

Taxes can seriously erode an investor’s returns over time.
An extension tax loss harvesting strategy – offered by Gateway – may provide a consistent source of potential capital losses that can be harvested to offset gains.
Employing such a strategy may help protect an investor’s return through any market environment.

Gateway market perspective – October 2025

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Natixis Investment Managers does not provide tax or legal advice. Please consult with a tax or legal professional prior to making any investment decisions.

Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Natixis Investment Managers, or any of its affiliates.

All investing involves risk, including the risk of loss of principal. Investment risk exists with equity, fixed-income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided.

Diversification does not guarantee a profit or protect against a loss.

Past performance is no guarantee of future results.

CFA^® and Chartered Financial Analyst^® are registered trademarks owned by the CFA Institute.

The S&P 500^® is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and covers approximately 80% of available market capitalization.

The Cboe S&P 500^® BuyWrite Index^SM (BXM^SM) is a benchmark index designed to track the performance of a hypothetical buy-write strategy on the S&P 500^® Index. The BXM is a passive total return index based on (1) buying an S&P 500^® stock index portfolio, and (2) “writing” (or selling) the near-term S&P 500^® Index (SPX^SM) “covered” call option, generally on the third Friday of each month. The SPX call written will have about one month remaining to expiration, with an exercise price just above the prevailing index level (i.e., slightly out of the money). The SPX call is held until expiration and cash settled, at which time a new one-month, near-the-money call is written.

The Cboe Volatility Index^® (VIX^®) is a key measure of market expectations of near-term volatility conveyed by S&P 500^® stock index option prices. The Cboe Volatility Index^® (VIX^®) reflects a market estimate of future volatility, based on the weighted average of the implied volatilities for a wide range of strikes, first- and second-month expirations are used until eight days from expiration, then the second and third are used.

Tax loss harvesting is a strategy for selling securities that have lost value in order to offset taxes on capital gains.

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