Despite uncertainty surrounding potential Fed rate cuts, economic strength and diminishing recession fears led to the best Q1 U.S. market performance since 2019, with the S&P 500® up 11%. Mega-cap dominance was pervasive, with the S&P 500 Top 50 up 12%. The broadening of the rally continued in March, with the S&P MidCap 400® up 6%, outpacing the S&P 500's 3% gain. Except for Real Estate, all sectors posted gains in Q1, led by Communication Services and Energy. [...]

Markets shook off looming concerns over inflation and the Fed’s future rate trajectory with more record highs in February, driving the S&P 500® up 5%. With a consistent tailwind of interest in AI and generally better than expected Q4 earnings, mega caps continued to show strength with the S&P 500 Top 50 up 6%. While small caps lagged, the rally began to broaden with mid caps slightly outpacing their large-cap counterparts, with the S&P MidCap 400® up [...]

Despite a sharp drop on the final trading day of the month post Fed Chair Powell's comments indicating rate cuts were not imminent, the S&P 500® rose 2% in January. The month was characterized by a series of record highs, driven by strength from the Magnificent 7, which propelled the mega-cap S&P 500 Top 50 up 3%. Strong Q4 2023 economic data also dampened optimism that the Fed would be able to begin cutting rates as [...]

Optimism returned to the market with a vengeance in November, as cooling inflation readings raised expectations for future Fed rate cuts, boosting U.S. equities, with the S&P 500® up 9% in November. With the exception of Energy, all sectors posted gains, led by Information Technology, up a staggering 13%. Consistent with the upbeat market sentiment, High Beta and Momentum led among factor indices, while their defensive counterparts Dividend Aristocrats and Low Volatility unsurprisingly lagged.

Despite strong economic growth, the market malaise continued, as mixed earnings results, surging Treasury yields, geopolitical tensions, as well as uncertainty surrounding the Fed’s future rate trajectory spooked U.S. equities, with the S&P 500® down 2% in October. Continued concerns around an impending recession were detrimental to the more domestically oriented S&P MidCap 400® and S&P SmallCap 600®, down 5% and 6%, respectively, underperforming their large-cap counterpart. Utilities was the sole sector to post a gain in [...]