The July employment report, released August 1, showed payrolls increasing by just 73,000—well below expectations—while prior months were revised down by a combined 258,000, signaling a cooling labor market that could weigh on consumer spending and reinforce the case for late-year Fed rate cuts.
The Federal Reserve held rates steady for a fifth consecutive meeting in July, with Chair Powell emphasizing data dependence and resisting political pressure, even as internal dissent and weakening labor market data raised the likelihood of a potential rate cut later this year.
Market behavior in July reflected a clear risk-on tone, with the S&P High Beta ETF (SPHB) gaining 5.4% while the S&P Low Volatility ETF (SPLV) declined 0.3%, signaling investor preference for higher-volatility, growth-oriented exposures.
Interest rates held steady in July, with the 10-year Treasury yield retreating from the 4.50% resistance level to end at 4.37%, as bond markets echoed the Fed’s data-dependent “wait and see” stance, even amid rising political pressure and growing signs of labor market softening.
Economic growth rebounded, with Q2 GDP rising 3.0%, though the first-half average of 1.25% points to only moderate underlying momentum.
Equities extended their rally in July, with the S&P 500 rising 2.2% and the Nasdaq gaining approximately 3.7%, as strong earnings, favorable economic data, and progress on trade helped sustain momentum.
Equity Markets
July extended the rally in U.S. equities, supported by solid corporate earnings, favorable economic readings, and meaningful progress on trade policy. The S&P 500 posted multiple record closes—including a six‑session winning streak toward month‑end. Interestingly, the month never saw a daily move exceeding ±1% throughout July, the first time since October 2024. The index gained 2.2% for the month, while the Nasdaq Composite was higher by 3.7%, buoyed by strength in the Magnificent Seven and broader tech leadership.
Market behavior in July reflected a clear "risk-on" tone and exhibited some signs of a blow-off top, as investors rotated into higher-beta, more economically sensitive stocks amid strong earnings and largely brushed off any less-than-ideal data or headlines. The S&P High Beta ETF (SPHB) advanced 5.4% for the month, outpacing the broader S&P 500 and highlighting increased investor appetite for risk. In contrast, the S&P Low Volatility ETF (SPLV) declined -0.3%, underscoring a retreat from defensive positioning.
Progress and Caution
Progress and Caution
Performance Review & Outlook
Highlights
The July employment report, released August 1, showed payrolls increasing by just 73,000—well below expectations—while prior months were revised down by a combined 258,000, signaling a cooling labor market that could weigh on consumer spending and reinforce the case for late-year Fed rate cuts.
The Federal Reserve held rates steady for a fifth consecutive meeting in July, with Chair Powell emphasizing data dependence and resisting political pressure, even as internal dissent and weakening labor market data raised the likelihood of a potential rate cut later this year.
Market behavior in July reflected a clear risk-on tone, with the S&P High Beta ETF (SPHB) gaining 5.4% while the S&P Low Volatility ETF (SPLV) declined 0.3%, signaling investor preference for higher-volatility, growth-oriented exposures.
Interest rates held steady in July, with the 10-year Treasury yield retreating from the 4.50% resistance level to end at 4.37%, as bond markets echoed the Fed’s data-dependent “wait and see” stance, even amid rising political pressure and growing signs of labor market softening.
Economic growth rebounded, with Q2 GDP rising 3.0%, though the first-half average of 1.25% points to only moderate underlying momentum.
Equities extended their rally in July, with the S&P 500 rising 2.2% and the Nasdaq gaining approximately 3.7%, as strong earnings, favorable economic data, and progress on trade helped sustain momentum.
Equity Markets
July extended the rally in U.S. equities, supported by solid corporate earnings, favorable economic readings, and meaningful progress on trade policy. The S&P 500 posted multiple record closes—including a six‑session winning streak toward month‑end. Interestingly, the month never saw a daily move exceeding ±1% throughout July, the first time since October 2024. The index gained 2.2% for the month, while the Nasdaq Composite was higher by 3.7%, buoyed by strength in the Magnificent Seven and broader tech leadership.
Market behavior in July reflected a clear "risk-on" tone and exhibited some signs of a blow-off top, as investors rotated into higher-beta, more economically sensitive stocks amid strong earnings and largely brushed off any less-than-ideal data or headlines. The S&P High Beta ETF (SPHB) advanced 5.4% for the month, outpacing the broader S&P 500 and highlighting increased investor appetite for risk. In contrast, the S&P Low Volatility ETF (SPLV) declined -0.3%, underscoring a retreat from defensive positioning.
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