Federal Reserve Set to Begin Cutting Interest Rates in September

Stocks traded higher in August despite an early-month selloff. The S&P 500 dropped over -5% in the first week after a report showed unemployment rose to 4.3% in July…

The Stock Market Experienced a Big Rotation in July

Last week U.S. equity indices once again posted mixed performance in volatile trading as investors assessed the latest economic data and corporate earnings results…

Global Markets Trade Higher After April Sell-Off

The S&P 500 set a new all-time high in May after trading lower in April. The technology-heavy Nasdaq 100 Index gained +6.2% and set a new all-time high, with mega-cap stocks like Nvidia, Apple, Microsoft, and Facebook-parent Meta leading the recovery…READ MORE

Rising Treasury Yields Cause Stocks & Bonds to Trade Lower

Stocks continued their upward trajectory in early 2024. The S&P 500 returned more than 10% for a second consecutive quarter, setting multiple new all-time highs along the way. Notably, this quarter saw…

Stocks Trade Higher in February as the Rally Broadens Out

The S&P 500 Index gained +5.2%, underperforming the Russell 2000 Index’s +5.6% return. All eleven S&P 500 sectors traded higher, with cyclical sectors outperforming…

Multiple Stock Market Indices Set New All-Time Highs in January

Financial markets underwent a sizeable shift in the fourth quarter. Treasury yields, which spiked in Q3, reversed lower as inflation eased and the Federal Reserve hinted at interest rate cuts in 2024…

S&P 500 Registers its Biggest Monthly Gain Since July 2022

Stocks Trade Higher as Treasury Yields Reverse Lower

The big story during November was the decline in Treasury yields. The bond market experienced large moves in interest rates, with the 10-year Treasury yield falling to 4.36% from over 5% in October. For context, the -0.54% decline in the 10-year yield ranks among the biggest 1-month drops since December 2008, when the Federal Reserve cut interest rates by -0.75%. Falling Treasury yields provided relief to bonds, which have traded lower as the Federal Reserve hikes rates. The Bloomberg U.S. Bond Aggregate Index, which tracks a broad index of U.S. bonds, produced a +4.6% total return. It was the index’s first gain in seven months and its biggest gain since 1985.

Stocks & Bonds Trade Lower as Interest Rates Continue to Rise

Monthly Market Summary

The S&P 500 Index declined -2.2% in October but outperformed the Russell 2000 Index’s -6.9% decline. The Utility sector was the top-performing S&P 500 sector, while Energy and Consumer Discretionary led to the downside.
Corporate investment-grade bonds produced a -2.4% total return in October, underperforming corporate high-yield bonds’ -1.0% total return.

S&P 500 and Dow Jones Trade Within 5% of Their All-Time Closing Highs

The S&P 500 extended its winning streak to five months in July, bringing its year-to-date total return to 20.5%. The S&P 500 has now recovered most of its losses from 2022 and is currently trading less than 5% below its all-time closing high set in January 2022. On a related note, the Dow Jones Industrial Average, which tracks 30 prominent U.S. companies, recorded a 13-day winning streak in July – its longest since 1987. Like the S&P 500, the Dow Jones is also trading less than 5% below its all-time closing high, set back in January 2022.

Stocks Trade Lower in August as Interest Rates Rise

The S&P 500 traded lower during the first half of August, at one point erasing all of July’s 3.3% gain. The sell-off occurred as investors worried about the potential for further interest rate hikes and increased bond issuance by the Treasury to fund government spending. Interest rates rose to levels last seen in 2007, with the 10-year Treasury yield climbing to 4.35%. This sudden rise in interest rates caught the market by surprise and weighed on stock market valuations. However, interest rates reversed a portion of their rise later in the month, with the 10-year Treasury retreating to 4.09%. The S&P 500 found its footing as yields declined and recovered to finish the month with a -1.6% decline, its first monthly loss since February of this year.