Market developments
Equities: The S&P 500 index gained approximately 1.5% for the week, nearing its all-time highs. All but one (Energy) of the sectors in the S&P 500 advanced, reflecting continued investor optimism. With earnings season mostly behind us, the market is closely watching for clearer guidance on the Fed’s rate cut strategy, with significant implications for investor strategies moving forward. For the third consecutive week, Canada closed higher and is up low double digits for the year.
Fixed income: The U.S. two-year treasury yield dropped below 4% and the U.S. ten-year is ~3.8% as Federal Reserve Chair Jerome Powell noted that inflation has been easing, with recent data showing a decline. Meanwhile, he aims to prevent further deterioration in employment conditions as the labour market has shown signs of cooling.
Commodities: Gold prices remained strong, holding above $2,500 an ounce after Jerome Powell indicated that the time has come for interest rate cuts. Gold’s recent price increases have also been supported by strong central bank purchases, consumer demand in China, and heightened geopolitical tensions.