Stock Market Commentary -

U.S. equity markets extended their run through April, buoyed by the Fed’s prior decision to pause on more rate hikes this year. In early May, however, reports of stalling trade talks between China and the U.S. sent the S&P 500 down 6.6% as investors again worried about the implications of extended trade conflict. In a significant reversal, though, following its June 19 meeting, the Fed signaled the possibility of a rate cut this year if conditions warranted it. This eased investor concerns and the S&P 500 ended up 4.3% for Q2 and 18.5% YTD.

During Q2, growth stocks outperformed value stocks, led largely by the technology sector. Although most exposed to China, strong earnings drove the tech sector up 6.1% in Q2 and 27.1% YTD. Energy stocks suffered as the worst performing sector within the index. Concerns that a brewing trade war could induce a global slowdown caused oil prices to fall and investors to seek safety in large cap companies, which outperformed small cap companies.