July Monthly Market Review

An excerpt from our July Monthly Market Review:

Earnings beyond the wildest dreams of Wall Street propelled AI-related shares higher in July, extending a trend of total AI market domination. The earnings, market capitalization, and price gains of the U.S. equity market have all been heavily concentrated on AI-related firms. Outside of the U.S., advanced economy equity markets fell slightly, while emerging markets rose thanks to a jump in Chinese equities. With policy uncertainty high, the U.S. economy at full employment, inflation above target, and signs of incipient price pressures, the Fed, to no one’s surprise, left rates unchanged in July. There were, however, two dissenting Governors who argued that early signs of weakness warranted a rate cut. U.S. Treasury and investment grade credit markets lost ground. Yields on intermediate maturity Treasury notes rose but rates were little changed at the long and short ends of the curve. The U.S. dollar rose against major currencies in July, partially reversing its depreciating trend. Gold prices rose slightly.