Market Update
U.S. stocks enjoyed a notable month in August with major indexes reaching new record highs. Wall Street's performance was largely driven by strong corporate earnings (particularly in technology), an improving trade outlook, and continued economic resilience. During the month, the S&P 500 and the Dow reached record levels, while the NASDAQ saw strong gains and was just shy of its own all-time high. The information technology sector was the primary driver of the market's growth, with megacap firms, particularly AI and semiconductor companies, fueling the upturn.
Inflation continued to move away from the Federal Reserve's 2.0% target. July's Consumer Price Index (CPI), while soft on the surface, contained signs that tariffs were impacting inflation somewhat. The U.S. economy continued to show signs of renewed growth in the second quarter of 2025 on the heels of a modest decline in the first quarter. Some economists view tariffs, policy uncertainty, rising inflation, and tighter immigration restrictions as potentially causing increasing constraints on economic activity.
The bond market in August was primarily influenced by a combination of factors, including the Federal Reserve's monetary policy, economic data, geopolitical events, and ongoing tariff discourse. Ten-year Treasury yields were volatile throughout August but generally trended lower, especially after Fed Chair Powell's dovish comments suggesting an interest rate reduction in September.
International Markets
European stocks climbed at the end of July after the European Union reached a trade deal with the United States, averting a potentially damaging trade war. European price levels have gradually increased, with annual inflation rising to 2.0% in June from a year earlier. European economic growth has slowed, with gross domestic product ticking up a modest 0.1% in the second quarter. July saw mixed performance in China's stock market and economic indicators, influenced by ongoing trade dynamics, domestic policies, and a cautious global outlook. In July, the STOXX Europe 600 Index ticked up 0.8%; the United Kingdom's FTSE rose 3.8%; Japan's Nikkei 225 Index gained 3.2%; and China's Shanghai Composite Index climbed 3.3%.
On A Personal Note
Jeff and Peggy went to Quebec City and Cape Cod. Hiking, biking, and digging clams – which they then had for dinner. Drew and Stephanie dropped their oldest daughter off at college. That was tear-free, just like the baby shampoo! Back to school for Chris’s family brings with it some fall sports and activities. Chris’s oldest daughter is a football cheerleader and his youngest is playing soccer. Between these two things, the weekends will be pretty busy, but it fun for them. Lisa had a busy but fun August. She had her Class Reunion one weekend, the next weekend went to Dale Hollow for a girls trip, then the following weekend Lisa and David took an overnight trip to Indianapolis to see a concert. In between all of that, they both celebrated their birthdays. Sam spent a weekend visiting his family in August. They made the trek to Ohio wine country with some old family friends. His favorite was Vincent William for the beautiful Lake Erie views! Taylor and Peter took Charlotte on her first road trip to see Peter’s brother get married. It was a beautiful weekend full of lots of love and baby squeals.
