Stock Market All-Time Highs: The Election and Fed Meeting

November 14, 2024

Last week was rewarding for long-term investors, with election results and a Fed meeting providing the catalysts to boost several major stock indexes to all-time highs. Summarizing last week’s trading, the large-cap S&P 500 gained 4.66%, the Nasdaq 100 increased by 5.41%, and the Dow Jones Industrial Average rose by 4.61%. All three of these indexes made fresh weekly all-time-high closes.

 

Election Boost: S&P 500 Crosses Above 6,000

 

As last Tuesday's election results were finalized, markets had one thing on their mind: higher stock prices. Wednesday brought us a sharp rally in major stock indexes as government bonds dropped and yields rose. The broadest benchmark of the U.S. economy, the S&P 500 crossed the key psychological level of 6,000 and settled slightly beneath it to close out the week. Long-term investors will take it!

 

Federal Reserve (Fed) Rate Cut

 

As widely expected, the Fed cut the benchmark rate by 25 basis points at last week's November meeting — no surprises there. The move is the follow-up to the central bank’s large 50-basis-point cut in September, which brings the current target lending rate range to 4.50% - 4.75. The rate cut vote was unanimous. The move supports the labor market, with further data needed to gauge the current state of inflation. Major stock indexes were steady after the rate decision and subsequent Fed commentary, and stocks closed positively on the day as bond yields traded lower after being higher the day before.

 

Powell Press Conference

 

Fiscal Policy: As usual, attention turned to Federal Reserve Chair Jerome Powell’s 2:30 PM press conference after the 2:00 p.m. rate decision release last Thursday. Powell had some memorable responses during the Q&A session, notably some commentary on overall fiscal policy. “The federal government’s fiscal path, fiscal policy, is on an unsustainable path,” Powell said. “The level of our debt relative to the economy is not unsuitable, the path is unsustainable…. And we see that in a very large deficit, you’re at full employment [and] that’s expected to continue, so it’s important that be dealt with,” Powell added. “It is ultimately a threat to the economy.”

 

“Not Permitted Under Law”: It is widely known that relations between President-Elect Donald Trump and Powell may not be the most amicable, and the question about it came up during last week's presser. When asked if he would step down if the President-elect asked him to, Chair Powell’s response was a resounding, and short:  “No.” Questions surrounding the topic surfaced again later in the conference, with another reporter asking if the president-elect had the authority to fire or demote Powell.  The Fed chair responded that such an action is “not permitted under law.”

 

Volatility Fizzles

 

The most widely watched measurement of stock market volatility, the $VIX, dropped substantially on the heels of the election results and the Fed rate cut. The $VIX, aka Fear Index, closed under $15.00 last week — trading near the summer 2024 lows, indicating investor fear leaving the marketplace. After a down week for volatility and the $VIX declining by over 30% last week, are investors too optimistic in the short term? Objectively, much uncertainty was removed from markets last week, with known election outcomes and a known Fed decision. It will be about the Consumer Price Index (CPI) this week, and we will see how volatility reacts after the best week of 2024 for the S&P 500 and the Dow.

 

Consumer Sentiment

 

With all the talk last week surrounding elections and the Fed, what about the consumer? Fresh University of Michigan consumer sentiment data shows the consumer once again remaining resilient and cautiously optimistic. The UoM November consumer sentiment metric rose to a print of 73.0 versus 71.0 expected, much better than estimates.

 

This Week = CPI

 

It is that time in the data release cycle, and traders want to know where the nation stands on inflation. With the 25-basis-point cut in the books and government bond yields rising on the open market recently overall, eyes will be peeled on this all-important inflation metric being released this Wednesday morning.

 

The Takeaway

 

The start of November is very constructive for long-term investors. With the election out of the way and the market response looking favorable, attention will now shift back to inflation data and the direction of future Fed policy. This week has the data releases (PPI, CPI) that are needed to shape near-term market direction and consensus after a stellar run in major stock market indexes in October and to start in November. November is historically a good month for stock indexes. Bond yields and the U.S. dollar are also in focus right now.  We will be staying on top of the latest developments to keep you informed.

 

As always, if there is anything on your mind regarding the markets and your strategy, please contact us and we will connect to discuss.

 

Patience Over Panic: Interpreting Today’s Fed Decision

January 28, 2026
The Federal Reserve concluded its meeting today by leaving interest rates unchanged, maintaining the current policy range as it continues to assess the evolving economic landscape. This decision reflects a deliberate pause after recent policy adjustments and underscores the Fed’s ongoing effort to balance progress on inflation with signs of moderation in economic growth. In its statement, the Federal Open Market Committee acknowledged that inflation has continued to ease from prior peaks, though it remains above the Fed’s longer-term objective. At the same time, economic activity has shown resilience. Consumer spending has held up, business investment remains uneven but stable, and labor market conditions, while cooling from earlier strength, continue to reflect solid underlying demand for workers. Wage growth has moderated, but employment levels remain elevated relative to historical norms. The Fed’s decision to hold rates steady signals a desire for greater clarity before making additional policy moves. Policymakers have emphasized that future decisions will be driven by incoming data rather than a predetermined path. This approach reflects the complexity of the current environment, where encouraging inflation trends coexist with pockets of economic strength that could slow further progress if policy is eased too quickly. For the broader economy, a steady policy stance provides near-term predictability. Borrowing costs remain elevated compared to the prior decade, but the absence of additional tightening reduces the risk of an abrupt slowdown. Households and businesses continue to adapt to higher rates, and the Fed appears focused on avoiding unnecessary pressure that could undermine growth while inflation is already moving in the right direction. From a market perspective, today’s decision reinforces a theme investors have been grappling with for months: patience. Markets have spent much of the past year adjusting expectations around the timing and pace of potential rate cuts. The Fed’s message suggests that while easing may occur in the future, it is unlikely to happen rapidly or without clear evidence that inflation is sustainably under control. As a result, market movements are likely to remain sensitive to economic data, particularly inflation reports, employment figures, and indicators of consumer demand. Importantly, the Fed also reaffirmed its commitment to maintaining restrictive policy until it is confident that price stability has been restored. This reinforces the idea that the central bank is prioritizing long-term economic health over short-term market comfort. While this stance can introduce periods of volatility, it also supports the foundation for more durable growth over time. Looking ahead, the economic outlook remains constructive but uneven. Growth is expected to continue at a more moderate pace, with cooling inflation and stable employment supporting consumer activity. At the same time, higher financing costs and tighter credit conditions may weigh on certain sectors, particularly those that benefited from ultra-low rates in prior years. This divergence underscores the importance of diversification and discipline within investment strategies. At Affinity Capital, we view today’s decision as consistent with a broader transition toward a more normalized economic environment. The era of emergency-level policy is firmly behind us, and the path forward is likely to involve incremental adjustments rather than dramatic shifts. Periods like this often reward investors who remain focused on long-term objectives, risk management, and thoughtful portfolio construction rather than short-term headlines. As always, we will continue to monitor economic developments closely and assess how changes in monetary policy may impact portfolios and financial plans. While uncertainty remains a constant in markets, a measured and intentional approach continues to be the most reliable way to navigate it.

Markets, Geopolitics, and Recent Volatility

January 21, 2026
Recent market headlines have been driven less by economic data and more by geopolitics. In particular, renewed discussion around Greenland and its strategic importance has introduced a new layer of uncertainty into global markets. Greenland matters not because of its size or population, but because of its location and resources. It sits at a critical crossroads between North America and Europe, plays an increasingly important role in Arctic shipping routes, and holds significant reserves of rare earth minerals that are essential for technology, defense systems, and energy infrastructure. As global competition for these resources intensifies, Greenland has become a focal point in broader strategic and trade discussions. Markets reacted quickly to this uncertainty. U.S. stock indexes moved lower in a broad selloff, with technology shares leading the decline. At the same time, investors shifted toward more defensive assets, pushing volatility higher, lifting gold prices, and pressuring risk-oriented assets such as cryptocurrencies. Similar caution was reflected in overseas markets as well. When geopolitical issues intersect with trade policy, markets tend to respond swiftly. Even the possibility of changes in tariffs, trade relationships, or diplomatic alignment can influence assumptions about global supply chains, corporate earnings, and economic growth. That is what markets have been digesting. These developments are now a regular part of the global environment. Markets today must absorb not only interest rates and earnings reports, but also geopolitical strategy, resource security, and shifting alliances. This can create short-term market adjustments as investors reassess expectations. Geopolitical uncertainty does not automatically translate into lasting economic damage. Markets have navigated trade disputes, diplomatic standoffs, and strategic realignments many times before. Over time, clarity emerges, negotiations evolve, and economic activity adapts. We continue to watch these developments closely and view them as part of the broader global backdrop in which markets operate. While the headlines may feel new, the underlying dynamic of markets responding to geopolitical uncertainty is familiar and expected. If you have questions about how global events fit into the bigger picture, we are always available to talk them through. Understanding the context behind the headlines is often the most effective way to stay grounded when markets react to evolving global issues.

The Policy Pivot: Key Takeaways for Investors

December 11, 2025
The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.