Quarterly Insights – July 2019 Historically typical volatility returned in the second quarter as uncertainty regarding U.S.-China trade relations, future Federal Reserve interest rate policy, and the state of the U.S. and global economies caused a more-than-6% pullback in the S&P 500 during May, before stocks broadly recovered in June and finished the quarter near fresh all-time highs. In sharp contrast to the quiet, steady gains of the first quarter, stock market performance in the second quarter was one marked by extremes. The S&P 500 logged a 4% gain in April thanks to solid first quarter corporate earnings reports, which further reduced concerns that earnings growth peaked in 2018. Additionally, due in part to statistics that showed inflation well below the Fed’s target, investors’ expectations for a 2019 Fed interest rate cut rose in April, which added fuel to the bullish fire. The S&P 500 ended April near new all-time highs.