Markets Rise Modestly in the Third Quarter of 2019 as the Fed Cuts Rates and the Trade War Continues

The U.S. stock market increased modestly in the third quarter, propelling the S&P 500 and the DJIA to their best three-quarter start to the year since 1997, and NASDAQ to its best three-quarter start since 2013 – all while further extending what is the longest bull market in U.S. history.

The broader S&P 500 enters the final three months of the year with a gain of close to 19% – its best performance in over two decades – as the third quarter’s return of 1.18% padded its yearly return. The S&P 500 is just a hair shy of its all-time high reached on July 26th, but if you look at the performance over the past year, it has moved a paltry 2%, mostly a result of the selloff in stocks toward the end of 2018.

Interestingly, the same news that dominated the second quarter continued to dominate the third quarter, but there were some twists. Once again, two main themes kept influencing the markets: hopes of a trade truce between the U.S. and China and a decided shift by the Federal Reserve with respect to short-term rates.

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