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The S&P 500 Index faces its worst week in six months as global investors grapple with the possibility of sustained high interest rates to combat inflation.

The U.S. stock market saw increased volatility and a decline in response to a $4 trillion options event, alongside concerns about a strike impacting Detroit automakers.

The end of July marked the peak for the S&P 500 so far this year, as the steady market uptrend that began in mid March started to retreat as soon as the August began.

This week concerns surrounding economic slowdowns in China and the euro area, alongside rising oil prices caused equities to slide. Notably, technology stocks, such as Apple and Nvidia, played significant roles in market movements, especially with China’s plan to expand an iPhone ban.

Mutual funds continue to be extremely popular with investors of all types. According to the Investment Funds Institute of Canada (IFIC), as of the end of 2022, Canadians owned a total of $1,809 billion in mutual fund assets. In recent years, exchange-traded funds (ETFs) have outsold mutual funds, but with $314 billion in ETF assets, ETFs still have some way to go to catch up.

U.S. stocks saw a significant weekly rise as monthly jobs data suggested the Federal Reserve might halt its tightening measures. The S&P 500, Nasdaq, and TSX all increased by over 2.5% ahead of the long weekend.

Stocks climbed as traders analyzed comments from Federal Reserve speakers, including Jerome Powell’s statement that officials will be cautious about raising interest rates, signaling a prolonged period of tighter policy.

Equity markets faced a significant decline as fears of higher rates weakened sentiment, driving key indices toward their largest weekly loss since March.

U.S. markets marched into bull market territory in July as economic data continues to show resilience with strong growth and key inflation indicators easing.