While U.S. equity trading volume pulled back in the third quarter, alongside lower market volatility, new issuance was up, amid strong valuations, according to data from the U.S. Securities and Financial Markets Association (SIFMA).
In a new report, the industry trade group said that all of the major U.S. equity benchmarks posted strong increases in the third quarter, with quarterly gains ranging from 8.6% for the Dow Jones index to 17.1% for the Nasdaq. On a year-over-year basis, the Nasdaq was up 21.8% in the quarter, outpacing the S&P 500 at 16%, and the Dow, which was up 11%.
Against that backdrop, total equity capital formation rose 11.2% in the quarter to US$63.2 billion, the strongest quarter since the first three months of 2022, SIFMA reported.
The total equity market cap finished the quarter at US$67.7 trillion, up 7.9% on a quarter-over-quarter basis and 15.9% year over year, SIFMA said.
The number of listed companies also rose by 1.4% in the quarter to 5,492 — but was flat year over year, it noted.
Trading volumes were down in the third quarter, however, as market volatility metrics eased too.
The VIX was down by 32.2% in the quarter compared with the second quarter, SIFMA said — and, trading volumes for equities and ETFs declined from record highs in the previous quarter.
On a quarter-over-quarter basis, average daily volumes were down by 4.4% in equities and 9% in ETFs — but volumes are still up strongly from the same quarter a year ago, and trading in options rose to a new high, up 6.3% in the quarter.
On the fixed income side, trading volumes also declined in the third quarter. Average daily volumes were down 8.7% on a quarter-over-quarter basis in the quarter, but up 6.6% year-over-year.
Fixed income issuance was flat in the quarter at US$2.8 trillion, “the sixth consecutive quarterly issuance of over US$2.5 trillion,” SIFMA said.