Financial Markets Just Delivered a Powerful Reminder
The strong rally during the first quarter showed yet again that under the right conditions equities can thrive amid considerable uncertainty.
The bulls are charging on Wall Street.
Photographer: Ander Gillenea/AFP via Getty Images
What an impressive start to the year for US stocks! Not only did the S&P 500 Index achieve its largest first-quarter gain since 2019, it did so amidst significant challenges.
Despite the tragic and deadly wars in Gaza and Ukraine, escalating tensions between major global powers, the further weaponization of investment restrictions, and the unsettling news of three major advanced economies slipping into recession (Germany, Japan, and the United Kingdom), the S&P 500’s gains accelerated and broadened. The benchmark surged 10.2%, outpacing the Dow Jones Industrial Average (5.62%) and the Nasdaq Composite Index (9.11%). Remarkably, these gains occurred alongside a notable shift in expectations for interest rates that resulted in a 30 basis-point increase in the yields on two-year US Treasury notes and a similar move for 10-year yields. The 13% rise in Brent oil also failed to derail the strong rally.