Quarterly Market Insights | July 2024

U.S. Markets

Following a rocky start, stocks finished the second quarter higher as investors remained optimistic the Fed will manage interest rates with inflation trending lower.

For the quarter, the Standard & Poor’s 500 Index rose 3.92 percent, and the Nasdaq Composite picked up 8.26 percent. By contrast, the Dow Jones Industrial Average fell 1.73 percent.1

quotation mark icon

You can’t put a limit on anything. The more you dream, the farther you get.

Michael Phelps, USA Swimming, 28-time Olympic medalist including 23 Olympic gold medals

Rocky Start in Q2

Stocks lost ground in April as investors struggled with mixed economic news and mixed signals from the Fed.

Fresh Consumer Price Index data showed that March inflation was hotter than expected, However, retail sales for March suggested consumers were spending despite rising inflation. Fed Chair Jerome Powell possibly unsettled investors when his tone appeared to shift from confident to cagey about interest rate cuts. Also, tensions in the Middle East continued to rattle the markets.2,3,4

Goldilocks Economy

Markets turned in May, however, rallying around upbeat Q1 corporate reports and signs that the economy remained strong.

Some market watchers called it a “Goldilocks” economy, which is defined by economic activity that is neither too hot nor too cold. For example, the 175,000 jobs created in April was less than the 240,000 economists expected but still considered a solid showing.5,6

The Fed Remains in Focus

This momentum, along with news that inflation rose less than expected in May, bolstered investor sentiment. Enthusiasm was tempered, however, following the Fed's policy meeting in which only one rate cut for the year was penciled in, versus the three previously communicated in March.7,8

Sector Scorecard

The second quarter also saw a dispersion of returns across sectors, compared with the first quarter, when nearly all sectors were in the green and in a tighter range.

Technology (+8.63 percent) and Communications Services (+4.91 percent) led the gains, both exceeding the S&P 500’s overall return. Utilities (+3.79 percent) and Consumer Staples (+0.29 percent) were the only other sectors in the green. Consumer Discretionary (-0.81 percent) was essentially flat. Of the six other sectors that declined, Materials fell the farthest (-4.93 percent), while Energy (-3.44 percent), Industrials (-3.25 percent), Real Estate (-2.83 percent), Financials (-2.40 percent), and Health Care (-1.34 percent) were also lower.9

What Investors May Be Talking About in July

Early in the month, Companies will begin to give updates on business conditions in Q2 with some sharing their outlooks for Q3 and beyond. As these companies enter what is referred to as “earnings season,” FactSet research is estimating an (year-over-year) earnings growth rate for the S&P 500 at 8.8%. That would be the highest year-over-year growth rate since Q1 2022 (9.4 percent).10

Remember, forecasts or forward-looking statements are based on assumptions, subject to revision without notice, and may not materialize.

Along with business conditions, investors will be looking for updates on companies’ efforts with artificial intelligence. Of the S&P 500 companies, 199 cited the term “AI” during their earnings calls in Q1 2024. Will that number increase or decrease in Q2? By comparison, 219 companies mentioned the phrase “inflation” when discussing business conditions with shareholders in Q1, which was down from 303 a year earlier.11,12

The Fed meets once more before the fall season, July 30–31. At the conclusion of the June meeting, Fed Chair Powell said, “Inflation has eased over the past year but remains elevated.”

Fed officials adjusted their outlook and said they anticipate cutting short-term interest rates just once this year. Just a few months earlier, the Fed seemed prepared to cut rates three times in 2024. Investors are expected to react if the Fed adjusts its outlook for short-term rates again in July.13

World Markets

Much like the Dow Industrials, the MSCI EAFE Index fell 1.48 percent during the second quarter. Political uncertainty in Europe and investor concerns over Japan’s monetary policy contributed to the decline.14

Among European markets, France dropped 8.63 percent, Italy fell 4.59 percent, and Germany slipped 1.39 percent. By contrast, the UK rose 2.66 percent for the three-month period.15

Elsewhere, India picked up 7.31 percent while China’s Hang Seng index rose 7.12 percent. But Mexico lost 8.59 percent, Brazil fell 3.28 percent, and Australia dipped 1.64 percent.16


Gross Domestic Product (GDP)

The U.S. economy grew at a revised 1.4 percent in Q1—upward from the last estimate of 1.3 percent, but downward from the initial estimate of 1.6 percent. It was below economists’ expectations of 2.4 percent and below the fourth quarter’s 3.4 percent rate.17


Employers added 272,000 jobs in May, higher than the 190,000 economists expected. Unemployment edged up to 4.0 percent in May (versus April’s 3.9 percent rise), the first time in over two years the jobless rate hit 4 percent. Average hourly earnings increased 4.1 percent year over year in May, an uptick from April’s 3.9 percent wage growth.18

Retail Sales

Retail spending inched up 0.1 percent in May, below economists’ expectations. Sales increased 2.3 percent year over year.19

Industrial Production

Industrial output rose 0.9 percent in May as manufacturing staged a rebound and utilities boosted production. The increase bested economist expectations of 0.4 percent.20


New home construction dropped 5.5 percent in May to the lowest level in four years, spurred by higher financing costs for homebuilders and higher mortgage rates for homebuyers.21

Sales of existing homes fell 0.7 percent in May from the prior month. The median home sales price jumped to a record high $419,300.22

New home sales fell 11.3 percent in May, a decline from April’s upwardly revised 2.0 percent month-over-month gain—as higher mortgage rates appeared to continue taking a toll on demand. Year-over-year sales fell 16.5 percent.23

Consumer Price Index (CPI)

Consumer prices were essentially flat in May compared with the prior month, and up 3.3 percent from a year ago. Core CPI, which excludes food and energy, increased 0.2 percent in May—below expectations. Shelter, which rose 0.4 percent, was the largest factor for May’s increase in core prices.24

Durable Goods Orders

Orders of manufactured goods designed to last three years or longer increased 0.1 percent in May—the fourth consecutive month of gains. Orders of transportation equipment led the overall increase.25

The Fed

The Fed left interest rates unchanged at both Federal Open Market Committee (FOMC) meetings held in the second quarter.26

Minutes from the April/May meeting stated that some Fed officials worried about the lack of progress on inflation.

After the June 11-12 meeting, some investors were unsettled after learning Fed officials had shifted their outlook based on continued stubborn inflation data, and now only penciled in a single rate cut for the rest of the year. Back in March, the majority of Fed officials had indicated as many as three cuts were possible this year.

The next FOMC meeting will be July 30-31.

By the Numbers: 2024 Paris Summer Olympics

776 BCE27

The year the first Olympic Games took place

$9.7 billion28

The budget for the 2024 Paris game


The number of events scheduled for this year's games


The number of National Olympic Committees competing at the games

15 million30

The number of attendees expected at this year's games


The number of Olympic athletes


The number of volunteers supporting the event


The amount of Television broadcast hours dedicated to Olympic coverage


Days of fierce competition

$98 to $3,00030

Ticket prices for the opening ceremonies

6 grams32

The amount of gold in an Olympic gold medal

1. WSJ, June 28, 2024

2. WSJ.com, April 4, 2024

3. WSJ.com, April 16, 2024

4. CNBC.com, April 15, 2024

5. CNBC.com, May 15, 2024

6. CNBC.com, May 3, 2024

7. WSJ.com, June 12, 2024

8. APNews.com, June 27, 2024

9. Sectorspdrs.com, June 30, 2024

10. Insight.FactSet.com, June 21, 2024

11. Insight.FactSet.com, May 24, 2024

12. Insight.FactSet.com, May 17, 2024

13. CNBC.com, June 12, 2024

14. MSCI, June 30, 2024

15. MSCI, June 30, 2024

16. MSCI, June 30, 2024

17. BureauofEconomicAnalysis.gov, June 27, 2024

18. WSJ.com, June 7, 2024

19. CNBC.com, June 18, 2024

20. IndustryWeek.com, June 18, 2024

21. Marketwatch.com, June 20, 2024

22. National Association of Realtors, June 21, 2024

23. Reuters, June 26, 2024

24. WSJ.com, June 12, 2024

25. BankingJournal.aba.com, June 27, 2024

26. WSJ.com, June 12. 2024

27. Wikipedia.com, July 2, 2024

28. ESPN.com, May 14, 2024

29. Olympics.com, July 2, 2024

30. Forbes.com, April 24, 2024

31. EuroNews.com, January 31, 2024

32. NBC.com, June 23, 2024

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.


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