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Capital Market Impact

Get updates on recent capital market data and trends, including possible expectations for future outcomes.

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Capital Market Impact

Markets remain reactionary to Fed policy

The S&P 500® Index fell 2% last week after closing at a record high the previous week on incremental hawkishness from the Federal Reserve. The Dow had its worst week since October at -4%, while the NASDAQ was little changed. Investors quickly began to price in a peak in Fed dovishness, along with the reflation trade and economic growth. Technology and growth names were resilient, with notable weakness in commodities, financials, and cyclicals. 

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Capital Market Impact

The S&P 500 hits record high despite surging inflation

Technology and other growth sectors have reemerged as the market leaders, with the NASDAQ less than 1% below a record high and showing gains in four straight weeks. This shift is seen as a reaction to lower interest rates, improving valuations and the likely peak in earnings growth in the next few quarters have many predicting a resurgence of the growth leadership that drove much of the post-financial crisis bull market and a stall in the pro-cyclical “reopening” trade.