Market Insights

Advances in computing, semiconductors, medicine, and energy have been key drivers of the current business cycle. Many of the world’s largest corporations are investing heavily in new technologies to unlock future profitability. These capital investments have not only fueled innovation but also supported the broader stock market and corporate earnings. It is working circularly throughout markets, where one company’s capital expense is another’s revenue.

The economy has grown significantly since the last time it experienced a recession. Household incomes and financial savings stand at all-time highs, underscoring the strength of the past few years. Even faced with formidable headwinds-including wars, inflation, bank failures, and trade tensions-this expansion has endured and, more recently, even accelerated. Upgrades to GDP, fueled by improved capital investment and consumer spending, have reinforced this resilience.

Investors closely watch quarterly GDP reports to evaluate the strength and direction of the economy. These reports influence market sentiment, shape expectations for Federal Reserve policy, and offer valuable context for corporate earnings forecasts and portfolio decisions. The second-quarter GDP data showed a significant upside surprise, with the U.S. economy growing at an annualized rate of 3.0% from April through June.