Ch-ch-changes, just gonna have to be a different man

June 2, 2025 - DJIA = 40,270 – S&P 500 = 5,911 – Nasdaq = 19,113

Last summer the financial markets chief concern was how many times the Fed would cut interest rates. Back then it was the more the better. Of course there were other worries such as inflation, job growth, and Mag 7 earnings. But the Fed was the main focus.

Today Wall Street is still interested in interest rate cuts, but many other concerns have been added to the list. Presidential executive orders, tariffs, trade deals, geopolitical issues and conflicts, government deficits, court decisions, Japanese government bonds, U.S. credit rating down grade, and increasing cultural division are whipping the markets up and down daily.

This shifting and tumultuous landscape is impacting the economy. Uncertainty ripples through the system which the markets dislike. Old trading rules are being challenged. Things such as stocks and volatility indexes moving in the same direction, bond yields and gold moving together, and a weaker dollar with higher interest rates.

It's a new world and the markets are adjusting to it. This might be an extended process and will likely involve greater volatility and risk. The future economic and capital market leadership could be much different once the landscape stabilizes.

In the meantime, it’s important to manage volatility during this challenging process. There are many strategies that hedge risks, and they range from the sophisticated to the simple. One of the important things that investors can do is to be open minded about these changing markets.

If you want to learn more, please contact us with any questions.