U.S. Markets

The stock market rode a wave of optimism this month, thanks to continued belief in a potential interest rate cut by the Federal Reserve and the lessening U.S.-China trade tensions. 

The Dow Jones Industrial Average picked up 7.19 percent, while the Standard & Poor’s 500 Index rose 6.89 percent. The NASDAQ Composite led, gaining 7.42 percent.1

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Stocks opened the month lower, but soon rallied on the belief the Fed would adjust interest rates. A sluggish jobs report added fuel to the fire, further increasing investors’ confidence in a future rate cut.

Stocks gained on news that Mexico and the U.S. had averted further tariffs on Mexican imports. The rebound lost momentum, however, as tensions rose in the Middle East after shipping disruptions in the Gulf of Oman.

All Eyes on the Fed

At its June meeting, Federal Reserve officials issued a more "dovish" statement that indicated it would consider policy actions to sustain economic growth.

Investors interpreted the Fed statement to mean that rates could be adjusted as early as July. The enthusiasm helped ignite the next leg of June's rally, with the S&P 500 touching a new record high and the Dow Industrials and the NASDAQ Composite finishing a hairsbreadth from their historical peaks.

Mixed Signals

Stocks climbed again on the heels of a positive trade discussion between President Trump and China's President Xi – only to fall in response to comments by Fed Chair Powell, indicating continued uncertainty regarding the timing of any rate adjustment.

Sector Scorecard

All industry sectors, save Real Estate (-0.27 percent) and Utilities (-0.72 percent), moved higher in June, led by strong gains in Materials (+7.85 percent) and Technology (+6.48 percent). Prices also advanced in Communication Services (+1.60 percent), Consumer Discretionary (+4.79 percent), Consumer Staples (+1.03 percent), Energy (+2.21 percent), Financials (+1.30 percent), Health Care (+3.09 percent), and Industrials (+3.84 percent).2

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