Commentary

The past two years have been strong for investors, with the S&P 500 posting back-to-back gains of over 20 percent. At the start of this year, the S&P 500’s previous all-time high was set in January 2022 (4,796 on the first trading day of 2022). It took over two years to reclaim the prior high, but once the index broke through in late January 2024, it set more than 50 new highs this year.

Last week the financial markets remained strong, signaling a continuation of bullish sentiment among investors. The Dow Jones Industrial Average closed at a record high, gaining nearly 2% for the week. The gains were driven by strong performance across multiple sectors including technology, industrials, and healthcare.

The election is over, and global markets are analyzing the outcome and starting to adjust portfolios. Republicans are set to control the White House, Senate, and House, but the results are also notable for a historical reason: the president-elect, Donald Trump, is returning to office after a previous election loss—a rare political comeback not seen since Grover Cleveland in 1892. As a result, investors are looking to Trump’s first term as a roadmap for how his next administration’s policies may impact markets.

The Fed cut interest rates by 0.50% at its Federal Open Market Committee meeting last week. The market expected a cut but was unsure by how much. The debate between a 0.25% and a 0.50% cut dominated headlines over the past week, but it was mostly noise and likely won’t have a significant long-term impact. Now that the first cut is complete, the focus shifts to how much and how quickly the Fed will continue to cut rates.

The Fed cut interest rates by 0.50% at its Federal Open Market Committee meeting last week. The market expected a cut but was unsure by how much. The debate between a 0.25% and a 0.50% cut dominated headlines over the past week, but it was mostly noise and likely won’t have a significant long-term impact. Now that the first cut is complete, the focus shifts to how much and how quickly the Fed will continue to cut rates.

The Fed cut interest rates by 0.50% at its Federal Open Market Committee meeting last week. The market expected a cut but was unsure by how much. The debate between a 0.25% and a 0.50% cut dominated headlines over the past week, but it was mostly noise and likely won’t have a significant long-term impact. Now that the first cut is complete, the focus shifts to how much and how quickly the Fed will continue to cut rates.

After reaching all-time highs in mid-July, stocks have been under pressure for the last two weeks. For the month of July, the S&P 500 advanced 1.1%, its third consecutive monthly gain. The index briefly surpassed 5,600 for the first time before it traded lower in late July and gave back some of the gains. The tech-heavy Nasdaq 100, which led markets higher in the first half of this year, started to decline in July as Nvidia, Microsoft, Google-parent Alphabet, and Facebook-parent Meta traded down after their strong starts to the year. In the bond market, Treasury yields fell. As of the last Friday’s close, the NASDAQ is now in a correction as the decline for this tech-heavy index from its recent all-time high has exceeded 10%.

After reaching all-time highs in mid-July, stocks have been under pressure for the last two weeks. For the month of July, the S&P 500 advanced 1.1%, its third consecutive monthly gain. The index briefly surpassed 5,600 for the first time before it traded lower in late July and gave back some of the gains. The tech-heavy Nasdaq 100, which led markets higher in the first half of this year, started to decline in July as Nvidia, Microsoft, Google-parent Alphabet, and Facebook-parent Meta traded down after their strong starts to the year. In the bond market, Treasury yields fell. As of the last Friday’s close, the NASDAQ is now in a correction as the decline for this tech-heavy index from its recent all-time high has exceeded 10%.

The market continued a recent rotation trade last week, with the Russell 2000 gaining more than 2% while the “Magnificent 7” weighed down the Nasdaq and the S&P 500. The VIX Index remains well off its summer lows as the rotation leads to increased volatility. In the bond market, Treasury yields moved slightly higher, causing bonds to trade lower.