Economy & Markets

Four years ago, the S&P 500 reached its lowest level of the 2022 bear market in October. At the time, inflation was climbing at its fastest pace since the 1970s, the Federal Reserve was raising interest rates rapidly, and recession fears were widespread.

As interest rates have risen to multi-decade highs, one of the implications that has received less attention is the strengthening U.S. dollar. The dollar affects all aspects of financial markets, the economy, and everyday life.

Investors often use major indices like the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average as a way to understand how financial markets are performing.

The 19th century geologist Charles Lyell popularized the concept of “uniformitarianism,” a long word that reflects the simple idea that the natural forces shaping the earth today are the same ones that have consistently affected it across history.

The Nobel Prize-winning economist Paul Romer once wrote that "economic growth springs from better recipes, not just from more cooking."

With the November midterm election approaching, campaigns are starting to intensify across the country. Politics have only grown more divisive in recent decades, so it’s natural for investors to wonder whether the election should influence their financial decisions.

Markets experienced a challenging environment in July with major indices ending the month slightly lower. However, this is in the context of healthy year-to-date gains and a broad market that is not far from its all-time high.

Consumer spending is the engine of the U.S. economy, accounting for roughly two-thirds of overall economic activity. In theory, when consumers feel financially secure and optimistic, they tend to spend more, driving corporate profits and economic growth. When they feel uncertain, they may tighten their belts.

Alan Greenspan once said "since I've become a central banker, I have learned to mumble with great incoherence." Greenspan, who passed away recently at the age of 100, served as the Chair of the Federal Reserve from 1987 to 2006 and became one of the most influential economic figures of the 20th century.

The stock market has experienced historically strong returns over the past quarter, so the latest episode of volatility may raise questions among investors. The Nasdaq experienced its largest single-day fall in a year, with the index declining 4.2% on Friday, June 5.

May was a strong month for investors, with major indices reaching new all-time highs, even as the bond market faced challenges from inflation concerns. The S&P 500 climbed above 7,500 for the first time, supported by continued strength in technology stocks.

The Federal Reserve plays a central role in financial markets and the economy, and its importance has only grown in recent decades. From the 2008 global financial crisis to the inflationary period of the past several years, investors have followed every Fed decision carefully.