Quarterly Market Review (April-June)
Wall Street enjoyed a solid quarter of growth during a period of time that was anything but stable. April, May, and June saw a de-escalation in a major conflict, a reaffirmation of the independence of the central bank from political pressure, strong corporate earnings, a resilient consumer, and a U.S. economy that continued to expand, despite several tumultuous developments. Both the S&P 500 and the NASDAQ enjoyed their strongest quarters since 2020. The gains posted by the Dow put that index on track for its best first half in about five years and its biggest quarter since 2022.The quarter opened with investors still digesting tariff uncertainty and the ongoing U.S.-Iran conflict, which pushed energy prices higher and raised concerns about the efficacy of risk assets. These were concerns that equities were overvalued, while volatility increased as investors tried to price in the possibility of prolonged disruption to global trade and shipping routes. However, news of U.S.-Iran peace talks and a ceasefire in the Strait of Hormuz helped defuse one of the quarter’s biggest concerns. The reopening of key shipping lanes and the prospect of more stable energy markets supported risk appetite, with stocks moving higher.
Information technology and communication services were the sector leaders as investor enthusiasm for AI drove much of the market. Industrials, real estate, financials, and healthcare also made notable strides by end of the second quarter.
The U.S. bond market spent much of the second quarter oscillating between rising and falling yields, influenced by resilient growth, stubborn inflation, and a cautious Federal Reserve. Treasury yields drifted higher in the second quarter as energy-linked inflation coupled with fading hopes for near-term fiscal easing ultimately pushed yields up but not without periods of decline. The 10-year Treasury yield spent most the quarter swaying within a volatile 4.0%-4.5% range.
International Markets
June saw strong stock market performances in Europe and Asia, driven by easing energy costs and a continuing surge in AI shares. European equities had their strongest quarterly performance since the three months ended October 2020. Asian stock markets enjoyed their strongest quarter in 17 years. By the end of June, the STOXX Europe 600 Index rose 2.5% for the month and 9.9% for the second quarter; the United Kingdom's FTSE ticked up 1.7% for the month and 3.7% for the second quarter; Japan's Nikkei 225 Index gained 5.0% in June and 37.2% in the second quarter; and China's Shanghai Composite Index ticked up 0.5% in June and 5.2% in the second quarter.
On a Personal Note
Jeff and Peggy went to Austin, Texas for a long weekend. Heard some good music and had some great barbeque. Drew took the family to Colorado for a concert at Red Rocks. It is a one-of-a-kind venue! Chris went to Greensboro, North Carolina to watch his daughter compete in the YMCA National Gymnastics Meet. Lisa, David, and Shelbi went to a Reds game in June. It was a great night at the ballpark, and they got to see a win! Sam got back into the swing of golf in June. His team even managed to bring home the trophy in the annual Draft tournament! For Taylor, June was filled with toddler swim lessons, swinging at the park, and some spontaneous ice cream trips!
