U.S. stocks entered October on firm footing, but confidence weakened as investors confronted renewed inflation pressures and growing questions about the sustainability of the AI boom. Semiconductor and AI infrastructure shares came under pressure amid concerns over elevated valuations, Chinese competition, and the cost of financing massive AI investments.
September opened with markets confronting a less comfortable mix of resilient growth, sticky inflation, and renewed energy pressure. Escalating conflict involving Iran disrupted oil flows through the Strait of Hormuz and Red Sea routes, pushing crude prices higher and reviving concerns that the energy shock could keep inflation elevated.
Markets regained momentum in early August as investors looked past July’s technology selloff and grew more comfortable that the Federal Reserve may not need to raise rates in September. Strong second-quarter earnings helped restore confidence in the artificial intelligence trade, while gains broadened beyond mega-cap technology into smaller companies and other economically sensitive areas.
The second half of 2026 opened with markets balancing three competing forces: renewed U.S.-Iran hostilities, the first meaningful inflation relief in months, and the start of second-quarter earnings season. Stocks entered July with considerable momentum after the S&P 500 and Nasdaq Composite posted their strongest quarters since 2020, and the Dow Jones Industrial Average notched back-to-back record closes in the opening days of the month.
August 2024 - Market Update It’s taken a while, but the elusive sub-3% annual inflation1 is now a reality......seemingly providing the Federal Reserve with enough justification to cut rates at its September meeting. The Consumer Price Index (CPI) for July increased by 0.2% from June and 2.9% from the previous year, marking the lowest annual rise since March 20211. Shelter costs remain a sticky point in the inflation reports and were the main driver of July’s inflation, accounting for 90% of the monthly rise in headline CPI1. Excluding food and energy costs, core CPI rose 3.2% year-over-year, the [...]
July 2024 - Market Update June saw more progress on inflation. The Consumer Price Index (CPI) declined by 0.1% month-over-month for the first time since the pandemic began1. The drop was driven by reduced costs for gas and electricity, leading to lower energy prices1. Also, shelter prices had their smallest rise in three years1, offering hope for the stickiest component of CPI. Over the last year, CPI rose by 3%, while used car prices fell by 10.1%1. Core CPI, which excludes food and energy, rose by only 0.1% from May, the smallest increase since 20211. In aggregate, [...]
June 2024 - Market Update Good news for consumers: the latest data showed inflation is finally easing... ...with the Consumer Price Index (CPI) showing a drop in prices for necessities and discretionary items1. Headline CPI was unchanged in May, marking the tamest reading since mid-2022, while core CPI rose by 0.2%1. Both measures signal a potential slowing trend1, which, if sustained, would continue to be welcome news for investors. This easing is attributed to smoother-functioning supply chains, a cooling jobs market, and more stretched consumer budgets. Economists suggest that the reduced inflation in goods is starting to [...]
May 2024 - Market Update As analysts assess the health of the economy, the latest jobs reports raise concerns about a potential slowdown.In April, nonfarm payrolls rose by the smallest amount in six months. The unexpected slowdown in job creation was underscored by a rise in the unemployment rate, which ticked up from 3.8% to 3.9%1. This rise in unemployment, coupled with weaker-than-expected business activity in the service sector2 suggests a potential cooling in the labor market. In addition, jobless claims are on the rise, with significant increases in claims observed in New York and California, where a minimum-wage [...]
April 2024 - Market Update The road to a normal inflationary environment looks longer than it did before. The March Consumer Price Index (CPI) report showed that headline and core CPI both rose by 0.4% on a monthly basis, exceeding forecasts and marking the third month of 0.4% increase in core CPI1. The increases in headline and core CPI underscore persisting inflationary pressures and were primarily driven by housing and gasoline costs1. The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) price index, saw a year-over-year increase of 2.5% in March, indicating a moderating inflation [...]
March 2024 - Market Update In February, the US experienced a slight acceleration in inflation. This acceleration is shown with year-over-year prices growing by 3.2%, a bit more than expected, and marking a modest increase from January's 3.1% rise(1). The acceleration in monthly prices was largely caused by rising gas and shelter costs, which together accounted for over 60% of the increase. Despite this, the so-called "super core" inflation, which excludes food, energy, and shelter, provided a bit of a silver lining by substantially slowing down in February, though still above the Federal Reserve’s comfort zone. This [...]
February 2024 - Market Update The jobs market continues to show remarkable resilience. In January, there were 353,000 new jobs added, the largest increase in one year1. Wages also grew by 0.6%, giving consumers a boost in their inflation-adjusted spending power. Treasury yields surged immediately following the strong job report, reinforcing the Federal Reserve's stance on maintaining rates a bit longer. The Federal Reserve’s recent statement signaled a cautious approach towards rate cuts, emphasizing the need for sustained inflation trends before adjusting rates, challenging previous market expectations of a March rate cut2. In January, the Consumer Price [...]
January 2024 - Market Update Jobs, inflation, and expectations around what the Federal Reserve may or may not do continue to be the focus of markets as 2024 begins. The latest jobs report showed December exceeded most economists' expectations, with the economy adding 216,000 jobs,1 surpassing estimates by 41,000.2 Further, wages rose more than anticipated, having gained 4.1% compared to December 2022.1 While the unemployment rate remained steady at 3.7%,1 the drop in labor force participation will be an area to watch. Overall, last year saw 2.7 million new jobs as the economy1 defied strongly held expectations [...]
