It’s beginning to feel a bit old hat as many of the previous weeks’ drivers have continued to be present this week. We’re talking about trade and the Fed. The week kicked off with investors cheering the extension of the pending increase in tariffs as significant progress has been made between China and the U.S. While no official deal has been made, the fact that extra tariffs have been pushed off the plate was a bullish sign.
At the same time, the now dovish Fed has continued to be a big driver of returns this week. Several pieces of testimony from Jerome Powell and other Fed officials have supported the idea that interest rates will take a slower path higher and that the Fed is watching the data closely. Again, stocks were supportive of this idea.
All in all, traders spent much of the week pushing stocks higher. However, gains were muted as cautious data and earnings kept a tight lid on returns. In the end, the markets were relatively calm.
Be sure to check out our previous Wrap here, when trade was also the main driver.
