Rising Rates, Resilient AI: Markets Face a Pivotal Fed Moment
The S&P 500 returned -0.8% as a jump in oil prices and two hot inflation gauges drove bond yields higher. Mid-cap stocks (-1.7%) and small-cap stocks (-2.4%) both fared worse than large caps. Within the S&P 500, energy (+2.1%) and communication services (+1.1%) were the only sectors with gains; healthcare (-3.5%) and materials (-2.7%) were the worst performing. EAFE markets returned -1.4% with losses in Europe (-1.7%) and the U.K. (-1.6%), while EM markets returned -0.2% with gains in Korea (+4.1%) offset by losses in China (-2.8%) and India (-2.8%).