Economy & Markets

The market recently experienced its largest one-day decline since April, driven by escalating tensions between the U.S. and China over rare earth metals and tariff threats. While the brief selloff rattled some investors, markets quickly improved following softer language from the White House around trade.

Washington is back in the headlines as the federal government faces a shutdown if policymakers can't reach a new funding agreement. This adds to a year in which government policies around trade, taxes, immigration, and more have created uncertainty for the economy and markets.

As markets reach new highs and artificial intelligence stocks continue to rally, some investors are asking "are we in a bubble?" This is as much about investor psychology as it is about market conditions.

Investors often find themselves looking in the rearview mirror even when they know that what lies ahead is most important. Recent reports, which are naturally backward-looking, have some investors and policymakers concerned about the economy, leading some to wonder if there will be a recession.

The stock market climbed to new all-time highs in August, while bonds also contributed positively to portfolios. This occurred despite continued uncertainty around tariffs, Fed independence, and technology stocks.

Fed Chair Jerome Powell's recent speech at the Fed's annual Jackson Hole conference, which has been covered extensively in the media, reinforced that an interest rate cut in September is likely.

For investors trying to understand the economy, recent reports have provided mixed signals, even leading President Trump to fire the Bureau of Labor Statistics commissioner. The latest jobs numbers showed weakness and negative revisions, but there are also signs that GDP growth rebounded in the second quarter.

The S&P 500 notched ten new all-time highs in July, fueled by strong corporate earnings, resilient economic data, and new trade deals ahead of the tariff deadline. This included six consecutive record closes in the second half of the month, all of which contributed to year-to-date gains of 7.8% for the S&P 500.

While investors always look to corporate earnings for clues about how businesses are performing, the current earnings season arguably carries greater importance due to tariffs.

For many Americans, the status of the U.S. dollar reflects the country’s position in the world. However, the dollar has weakened in recent months amid trade and economic uncertainty, declining against a basket of major currencies to its lowest level in three years.

Financial markets rebounded in May with the S&P 500 recovering its year-to-date losses. This positive month occurred against a backdrop of new trade agreements, mixed economic signals, and ongoing concerns about U.S. fiscal health.

A key principle of investing is that patience, discipline, and maintaining a long-term perspective are what drive financial success. Perhaps no investor has captured this wisdom as eloquently as Warren Buffett over his five-decade career as CEO of Berkshire Hathaway.