The US stock market rebounded exceptionally over the second quarter, erasing the losses from the “Liberation Day” tariff announcement that sent stocks tumbling in early April. US stocks climbed over 5% for the second month in a row. Several stock market indices closed at all-time highs as consumer sentiment improved, and trade tensions and tariff rates continued to ease as we approach the 90 day tariff pause deadline. The latest inflation number came in slightly hotter than last month’s reading, but has remained stable despite the concern of tariffs, and oil shocks from turmoil in the Middle East.
The new administration’s big bill has driven concerns of a significant increase in deficit spending and how that could impact the US government’s borrowing rates. Despite this, yields broadly declined over the month and quarter and fixed income posted strong gains. The Federal Reserve continues to preach caution amid resilient economic data, yet investors still expect them to lower rates later this year.
International stocks continued their upward climb in the second quarter, led by emerging markets posting strong gains. A weakening dollar combined with the de-escalation of tariffs between the US, China, and several other countries to drive the strong performance. Decreased borrowing costs from easing monetary policy in Europe supported stocks. International bonds appreciated over the month and quarter as yields declined.
Looking ahead, policy decisions from the White House and shifting global trade dynamics will continue to drive markets. Second quarter earnings reports, fresh economic data, and future Fed decisions will be front and center as we head into the second half of the year.
| Index Performance | ||||
| US Stocks (Russell 3000) | ||||
| International Stocks (FTSE AW ex US) | ||||
| US Bond Mkt. (BBgBarc Int. Gov/Cred) | ||||
| Cash (ICE BofA ML 3-Mo T-Bill) |