The 2^nd quarter (Q2) began with a truly historic selloff after the Liberation Day tariff announcements on April 2. The S&P 500 saw its 5th biggest two-day decline since WWII, down more than -10%. That decline had only been rivaled around Black Monday 1987, the height of the GFC, and the initial pandemic turmoil. But by the end of June, the S&P 500 ended up +10.9% for Q2 (its best quarter since 2023) and closed the quarter at an all-time high (+6.2% year-to-date). Here are 3 things you need to know:

1. The dollar saw its worst first half of the year (-10.7%) since 1973 amid uncertainty about U.S. trade and fiscal policy.
2. Fiscal fears meant that long-end Treasuries struggled, with the 30-yr. yield up +20 basis points (bps) to 4.77%. However, that was some way beneath the intraday peak of 5.15%.
3. One of the best assets this year has been gold, which has just posted its strongest first half since 1980, up +25.9%.

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; Deutsche Bank; 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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