Market enters 2024 halftime with solid lead

  • Friday reversal flips week from up to down
  • Cooling inflation keeps spotlight on Fed timeline
  • This week: Jobs, Powell comments, Fourth of July

Despite some friendly economic data last week, tech volatility contributed to a bumpy end to what was nonetheless a strong first half for US stocks.  

The S&P 500 (SPX) narrowly missed its ninth positive week of the past 10, but a Friday reversal erased its gains for the day and the week. The index had tagged a new all-time intraday high early in the day after the Federal Reserve’s go-to inflation gauge, the PCE Price Index, provided more evidence of cooling inflation:

Chart 1: S&P 500 (SPX), 5/24/24–6/28/24. S&P 500 (SPX) price chart. Soft finish to strong month.

Source: Power E*TRADE. (For illustrative purposes. Not a recommendation. Note: It is not possible to invest in an index.)

The headline: Down week, up month.

The fine print: In addition to the cool PCE reading, there were signs of a slowing economy in a few other notable data points last week, including core durable goods orders, which posted a surprise decline last Thursday. It may not be enough for a cautious Fed to pull the trigger on rate cuts next month, but September remains in play.

The number: 13. The SPX’s 14.5% return so far this year was its 13th-strongest first-half return since 1957.

The move: When Nvidia (NVDA) fell 6.7% to a nearly three-week low last Monday, the SPX and the Nasdaq 100 (NDX) tech index posted their biggest losses of the week. On Friday, both indexes followed NVDA in surrendering intraday gains. Traders expecting the stock rally to meaningfully broaden beyond NVDA and other megacap stocks in the near future may want to check out Morgan Stanley & Co.’s thoughts on the matter in “Navigating the Narrow Stock Market.” 

The scorecard: The Russell 2000 (RUT) enjoyed a rare market-leading return last week, and got back into the plus column for the year:

US stock index performance for week ending 6/28/24. S&P 500 (SPX), Nasdaq 100 (NDX), Russell 2000 (RUT), Dow Jones Industrial Average (DJIA).

Source (data): Power E*TRADE. (For illustrative purposes. Not a recommendation.)

Sector returns: The strongest S&P 500 sectors last week were energy (+2.7%), communication services (+1.3%), and real estate (+0.7%). The weakest sectors were materials (-1.1%), utilities (-1.1%), and consumer staples (-0.7%).

Stock movers: Alnylam Pharmaceuticals (ALNY) +35% to $222.9 on Monday, Enovix Corporation (ENVX) +35% to $16.26 on Tuesday. On the downside, Walgreens (WBA) -22% to $12.19 on Thursday, Cassava Sciences (SAVA) -35% to $12.35 on Friday.

Futures: August WTI crude oil (CLQ4) hit a two-month intraday high of $82.72 on Friday, but pulled back to end an up-and-down week modestly higher at $81.54. August gold (GCQ4) continued to trade sluggishly around its three-month lows, ending last week little changed at $2,339.60. Week’s biggest gains: October sugar (SBV4) +6%, September palladium (PAU4) +5.8%. Week’s biggest declines: September cocoa (CCU4) -13.2%, August natural gas (NGQ4) -8.3%.

Coming this week

Friday’s jobs report highlights a holiday-shortened—but very busy—week of economic data:

Monday: S&P Global Manufacturing PMI, ISM Manufacturing Index, Construction Spending
Tuesday: Fed Chairman Jerome Powell speaks, Job Openings and Labor Turnover Survey (JOLTS)
Wednesday: Challenger Job Cuts, ADP Employment, Balance of Trade, S&P Global Services PMI, ISM Services Index, Factory Orders
Thursday: Fourth of July (US markets closed)
Friday: Employment Report

This week’s earnings include:

Tuesday: MSC Industrial Direct (MSM), Simulations Plus (SLP)
Wednesday: Constellation Brands (STZ)
Friday: Kalvista Pharmaceuticals (KALV), Kura Sushi (KRUS)

Check the Active Trader Commentary each morning for an updated list of earnings announcements, IPOs, economic reports, and other market events.

Halftime report

The fact that the SPX’s first-half return is one of its strongest since the index expanded to 500 stocks in 1957 is even more surprising given this is a presidential election year, when first-half returns have tended to be muted (2.5% on average, compared to 4.1% for all years).1

While contrarians may suspect stronger-than-average first halves have tended to give way to soft second halves, they don’t have the data on their side. It’s true that some of the strongest January-June returns have been followed by second-half pullbacks (and vice versa), but that’s been more the exception than the rule:

●After its 15 strongest first halves, the SPX had 11 positive second halves, with an average return of 5.5%.

●After its 15 weakest first halves, the SPX had seven positive second halves, with an average return of 1%.

Also, in the 19 other years the SPX’s first-half return was roughly in the neighborhood of this year’s—more than 10% but less than 20%—the second-half return was positive 17 times, with an average gain of 8.8%.


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1 All figures reflect S&P 500 (SPX) monthly closing prices, 1957-2024. Supporting document available upon request.


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