Last week we finally saw a more meaningful pullback in the market. The S&P 500 dropped about 5%... and then nearly erased the entire move by Friday. We closed down less than a quarter of a percent from where we opened Monday morning.
The index found support right above 7,200 and bounced. What caught my attention was what led the recovery. It wasn't just the usual mega-cap stocks. The broader market and small caps actually led the way. That is what we want to see in a healthy bull market.
What the Economic Data Is Telling Us
This was a heavy week for economic data. A few things worth knowing.
Inflation at the consumer level came in at 4.2% annually, the highest reading since April 2023. That headline sounds alarming. But almost all of that heat came from energy prices, which jumped 23.5% year over year. Core inflation, which strips out food and energy, actually came in below expectations.
On the other side, the Producer Price Index, which measures what businesses are paying before costs reach consumers, came in well above expectations. That's worth watching going into the weeks ahead.
The University of Michigan's one year inflation outlook came in at 4.6%. Below forecast, but still the kind of number that keeps investors humble about declaring victory on prices.
Our technical indicators across trend, structure and momentum remain aligned and our positioning stays fully invested.
Curious what it looks like to have this kind of clarity in your corner?
The Fortress Financial team offers a complimentary call with no pressure and no obligation... just a straightforward conversation about where you stand.