Bull Market Continues
Both the S&P 500 and NASDAQ closed last week with new record highs. The S&P 500 added 0.86%, the Dow increased 0.47%%, and the NASDAQ gained 1.66%. International stocks also grew, increasing 1.52% for the week and the U.S Aggregate Bond Index added 0.26%.
This domestic growth occurred against a backdrop of geopolitical events. Investors considered new tariffs between China and the U.S., as well as legal developments potentially related to President Trump. However, economic updates seemed to hold the most sway over market performance last week.
What did we learn about the economy last week?
Beyond passing a major milestone in the bull market, we also received some key economic updates, including:
The Fed's interest rate increases should continue at a gradual pace.
In talks last week, Fed Chairman Jerome Powell called the economy "strong" and said inflation isn't overheating. He indicated the central bank intends to maintain its current pace of interest-rate raises. Markets increased after his remarks.
The labor market remains strong.
New claims for unemployment fell for the 3rd week in a row and were below expectations, continuing July's trend that included the lowest numbers since 1969. This data indicates that, despite U.S. companies facing ongoing trade tension, the labor market remains on solid ground.
Business investment may be on the rise.
Data for durable goods orders includes details that can hint at how businesses plan to approach spending. This so-called "non-defense capital goods excluding aircraft" grew far more than anticipated in July. The reports indicate that business investments started the 3rd quarter on solid ground.
These updates may help support economists' perspectives that the equity bull market still has life left. No one knows when the next meaningful selloff will take place, but the current conditions are strong.