AI Enthusiasm, Fed Rate Cuts and Strong Growth Power Stocks to New Highs The 2023 rally continued in the first quarter of 2024 as a positive combination of stable economic growth, falling inflation, impending Fed rate cuts and ever-growing enthusiasm towards artificial intelligence (AI) propelled stocks higher, as the S&P 500 hit new all-time highs. The year began with a modest uptick in volatility, as traders and investors initially booked profits following the strong 2023 gains. However, those initially small declines intensified shortly after [...]

Large-Cap Tech Stocks Push the S&P 500 Sharply Higher in 2023 Markets staged an impressive reversal in the fourth quarter thanks to a surprise dovish pivot by the Federal Reserve, which combined with solid economic activity and declining inflation to push stocks sharply higher and send the S&P 500 to two-plus-year highs, resulting in the best annual return since 2021.   The strong fourth quarter performance somewhat obscures the fact that stocks and bonds started the fourth quarter under significant pressure. First, Treasury yields continued [...]

Higher Interest Rates Weigh on Stocks in the Third Quarter The S&P 500 rose to the highest level since March 2022 early in the third quarter; however, fears of a rebound in inflation and concerns about a future economic slowdown weighed on the major indices in August and September. As a result, the S&P 500 finished in the red for the third quarter. The S&P 500 started the third quarter largely the same way it ended the second quarter – with gains. Stocks rose [...]

Declining Inflation and Resilient Growth Push Stocks Higher in Q2 The S&P 500 ended the second quarter and first half of 2023 at a 14-month high and most major stock indices logged solid gains in the second quarter following a pause in the Fed’s rate hike campaign, stronger-than-expected corporate earnings (especially in the tech sector) and the relatively drama-free resolution of the debt ceiling. The second quarter began with markets still in the throes of the regional bank crisis following the March failures of [...]

Markets Show Resilience to Start 2023 Markets started 2023 with strong gains in January, which were primarily driven by continued declines in widely followed inflation indicators. The decline in price pressures was coupled with surprisingly resilient economic data, especially in the labor market. Those forces combined to increase investors’ hopes that the Fed could deliver an economic soft landing, whereby the economy slows but avoids a painful recession while inflation moves close to the Fed’s target. Additionally, corporate earnings for the fourth quarter of [...]