Expectations for rate cuts buoyed the industries that have been hit hardest by the Fed’s campaign of rate hikes and the market rally started to broaden out. Here are 3 things you need to know:
- The S&P 500 eked out a +1.2% gain in July. The “Magnificent 7” was down -0.6% in total return terms thanks to a strong final day, but that’s still a big shift from gains of more than +9% in both May and June.
- 364 stocks in the S&P 500 had a positive return in the month.
- The small-cap Russell 2000 was up +10.2% in total return terms, which is its biggest outperformance relative to the NASDAQ since February 2001.
*The seven mega-cap stocks, also referred to as the “Magnificent Seven”, are Microsoft (MSFT) , Apple (AAPL), Alphabet (GOOGL), Amazon (AMZN), Nvidia (NVDA), Meta Platforms (META), and Tesla (TSLA).
Sources: J.P. Morgan Asset Management – Economic Update; Bureau of Economic Analysis (www.bea.gov); Bureau of Labor Statistics (www.bls.gov); Federal Open Market Committee (www.federalreserve.gov); Bloomberg; FactSet.
Indices:
- The Bloomberg Barclays Aggregate Bond Index is a broad-based index used as a proxy for the U.S. bond market. Total return quoted.
- The S&P 500 is designed to be a leading indicator of U.S. equities and is commonly used as a proxy for the U.S. stock market. Price return quoted.
- The Russell 2000 Index is a small-cap U.S. stock market index that makes up the smallest 2,000 stocks in the Russell Index.
- The MSCI ACWI ex-US Index captures large and mid-cap representation across 22 of 23 developed market countries (excluding the U.S.) and 27 emerging market countries. The index covers approximately 85% of the global equity opportunity set outside the U.S. Price return quoted.
- The MSCI Emerging Markets Index captures large and mid-cap segments in 26 emerging markets. Price return quoted (USD).
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