Yesterday, June 28th, marks the quarter’s final trading day and the year’s midpoint, with Q3 starting next week on July 1st. This juncture offers a pivotal moment to reflect on the market’s performance, evaluate the economic trends of June, and prepare for what lies ahead in Q3.

Market Performance and Predictions

June 2024 has been a month of mixed fortunes for the financial markets. The S&P 500 saw a modest gain of 3.8%, driven largely by strong performances in the technology and healthcare sectors. In contrast, the energy sector faced challenges, with U.S. oil demand and prices declining due to increased supply and a slowdown in global demand. The Dow Jones Industrial Average (DJIA) experienced a slight increase of 1.2%, influenced by performance in industrial stocks.

Our predictions for June foresaw a continuation of the bullish trend from May, particularly in tech stocks. While tech indeed showed resilience, unforeseen regulatory hurdles, and geopolitical tensions tempered the expected growth. Compared to May, where the S&P 500 surged by 3.8%, June’s growth was more subdued, reflecting a cautious investor sentiment.

Key Highlights and Challenges

• Inflation: Persistent inflation remains a critical concern, with the Consumer Price Index (CPI) rising by 0.4% in May slightly above expectations. This trend has put pressure on the Federal Reserve to consider fewer rate cuts than expected for the rest of 2024.

• Technology Sector: The technology sector showed resilience but faced regulatory challenges and geopolitical tensions that tempered expected growth, impacting overall market sentiment and sector-specific investments.

• Global Markets: Internationally, the European Central Bank’s (ECB) decision to slightly lower interest rates, among a backdrop of moderate economic growth, has influenced global investor sentiment. Emerging markets, particularly in Asia, faced volatility due to trade tensions and currency fluctuations.

Looking Ahead to Q3

As we transition into Q3, several factors will shape market dynamics:

• Monetary Policy: Anticipated rate decreases by the Federal Reserve will be a focal point, influencing borrowing costs and investor strategies.
• Earnings Season: Corporate earnings reports will provide insights into how businesses are navigating the current economic landscape. Tech and consumer discretionary sectors are expected to lead growth.
• Political Events: Ongoing political developments along with the U.S. election in November will continue to add volatility to the markets.

At Solist, we conduct weekly research and release monthly reports for our readers. With comprehensive graphs, commentaries, benchmarks, and charts, our detailed reports make complex economic information accessible and easy to digest. Stay tuned for our Q3 forecast and in-depth analysis to navigate the financial landscape effectively. Read the full report below.