October 2024 Market Commentary & Outlook

A five-month streak of strong gains in the US stock market came to an end in October as stocks declined over the month. Mixed economic data and uncertainty around the election ultimately pushed stocks lower. Inflation came in hotter than expected, unemployment remained unchanged but jobs growth data disappointed due in part to labor strikes. Corporate earnings have also been mixed; better than expected earnings reports from the banking and tech paired with lackluster earnings from consumer goods and energy added to the uncertainty investors felt about the economy heading into the election. 

Fixed income declined broadly in October as yields rose. The 10-Year treasury yield jumped above 4% in October, climbing over a half-percent from its 2024 low of 3.6% just a month ago. Conflicting economic data pushed yields upward and muddied the water around the path of the Federal Reserve’s (Fed) rate cutting cycle.

International stocks fell and trailed their US counterparts, driven partly by sticky eurozone inflation, continued turmoil in the Middle East and a strengthening dollar. The European Central Bank cut interest rates a third time, in line with expectations, after seeing continued softening economic data particularly from the manufacturing sector.

As we head toward the end of the year with clear election results behind us, investors have plenty to digest regarding the new administration’s potential impact. U.S. stocks responded positively immediately following the election, likely spurred by expectations of regulatory rollbacks and tax cuts. Policy intentions of the new administration—along with Federal Reserve interest rate decisions—will be key headlines and market drivers as we near the end of an eventful year in the markets.