Your Capital Markets Snapshot: Volatility Continues to Rattle US Equity Markets

Volatility continues to rattle US equity markets, and 2025 continues to highlight the importance of diversification. Last week the S&P 500 dipped into correction territory, down just over 10% from its February highs. The technology-heavy Nasdaq has experienced a more substantial decline of about 14%. This recent downturn is normal, US equity markets average about one 10% correction each year. Increased uncertainty around US trade policy, inflation, and geopolitics means volatility may remain elevated in the near-term. However, the U.S. economy is growing and corporate earnings are strong. These are two bullish indicators that can help anchor markets as the uncertainty resolves itself. Despite the recent downturns, certain sectors within U.S. equities, such as value and cyclical stocks, as well as international markets, like Europe and China, have provided pockets of growth. Bonds have outperformed stocks and provided modestly positive returns so YTD. These opportunities highlight the importance of maintaining a well-diversified portfolio.