Capital Market Impact

Stocks stay quiet despite bearish signs

June 19, 2024
Two men sit at table and discuss documents

So far in 2024 (through Monday, June 17), the S&P 500® Index has notched an impressive 30 all-time highs. Investors have weathered a convergence of varying economic reports, hawkish commentary from the Federal Reserve, and a dramatic reset of Fed rate cut expectations, all while geopolitical tensions remained elevated.

Despite the challenges, the market has demonstrated its resilience, with only one significant pullback for the year, a cumulative decline of 5.5% in April. The market’s robust rally from the October 2023 low, a testament to its strength, has bolstered bullish sentiment, supported by U.S. economic growth at or above trend and steady improvement in corporate earnings.

Not long ago, investors expected six rate cuts from the Federal Reserve. Those hopes were dashed by stubbornly high inflation and rebounding economic growth. As the year’s first half progressed, the market paired back its expectations for rate cuts, which should have dampened investor sentiment and halted the market rally.

At its June meeting, the Federal Open Market Committee voted to keep the federal funds target rate unchanged, with the median “dot plot” now showing only one cut in 2024, down from three at the March FOMC meeting. Despite the Fed’s more hawkish tilt, the S&P 500 recorded another new all-time high. Daily fluctuations in the S&P 500 have been notably modest in 2024. Only one day so far this year has seen a move of 2% or more.

Given the lack of extreme daily price fluctuations this year, investors should have a well-crafted financial plan and maintain a long-term perspective. Remember that market volatility is a natural part of investing, and a significant pullback is unlikely if GDP and EPS revisions do not significantly decline throughout the year.

Disclosure Statement:

  • This material is not a recommendation to buy or sell a financial product or to adopt an investment strategy. Investors should work with their financial professional to discuss their specific situation.

    Except where otherwise indicated, the views and opinions expressed are those of Nationwide as of the date noted, are subject to change at any time and may not come to pass.

    S&P 500® Index: An unmanaged, market capitalization-weighted index of 500 stocks of leading large-cap U.S. companies in leading industries; gives a broad look at the U.S. equities market and those companies’ stock price performance.

    S&P Indexes are trademarks of Standard & Poor’s and have been licensed for use by Nationwide Fund Advisors.  The Products are not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s does not make any representation regarding the advisability of investing in the Product.

    Nationwide Funds are distributed by Nationwide Fund Distributors LLC, member FINRA, Columbus, Ohio. Nationwide Investment Services Corporation, member FINRA, Columbus, Ohio.

    Nationwide, the Nationwide N and Eagle and Nationwide is on your side are service marks of Nationwide Mutual Insurance Company. © 2024 Nationwide

NFN-1661AO