Kai Luginbuhl – Director of Finance

As summer winds down and students shift their focus from leisure to academics and career prospects, many business students are eager to re-engage with the financial markets. The past few months have seen notable fluctuations in key stock indices, reflecting a period of significant volatility and growth. This article provides an overview of market movements from April to August, highlighting major trends and developments. 

The Dow Jones Industrial Average began a 5.5 per cent surge on Apr. 30, peaking 18 days later on May 17. This nearly 6 per cent increase was also observed in the Standard & Poor’s 500 (S&P 500), though to a lesser extent in the Toronto Stock Exchange (TSX). However, the Dow’s 5.8 per cent peak was almost immediately eliminated by a 4.9 per cent decline for the remainder of the month. Over the next two months, the Dow saw substantial growth, climbing from 6.5 per cent from May 30 to Jul. 30. Yet, a sudden drop of 5 per cent between Jul. 31 and Aug. 5 offset some of these gains. Following this decline, August concluded on a strong note with a 6.9 per cent growth from Aug. 5 to Aug. 30. Overall, the Dow experienced an 8.8 per cent growth over the summer period (May 1 to Aug. 30), a significant achievement for four months. 

Similarly, the S&P 500 enjoyed a nearly 6 per cent surge in early May and continued to climb, ultimately achieving a nearly 12 per cent gain by mid-July. From Jul. 17 to Aug. 5, the S&P experienced a decline of 8.5 per cent. However, like the Dow, the index rebounded with an almost 9 per cent surge in August, finishing the summer at a six-month high. The S&P 500 ended the period with a 11.1 per cent increase from early May to the end of August. The TSX/S&P composite indexes recorded a roughly 7 per cent gain during the same timeframe.

Overall, the summer was marked by strong but volatile performance across key indexes. Many factors contributed to this volatility, including global and U.S. political developments, concerns over China’s economic slowdown and ongoing unrest in Ukraine and the Middle East. Additionally, the U.S. election season intensified, with both major candidates solidifying their vice-presidential picks and gearing up for the final debates and polls. In terms of policy, the U.S. Federal Reserve maintained unchanged interest rates throughout the summer. However, in August, Fed. Chair Jerome Powell stated that “the time has come for policy to adjust”. While Powell’s words have prompted speculation, the only clear signal is that changes from the Federal Reserve are anticipated soon. 

This brief overview from April to August does not encompass all the events of the summer. However, it serves as a prompt for investors to revisit financial analyses and stay updated with market trends.

*None of the above is to be taken as financial advice or recommendations to buy or sell securities.

*Kai Luginbuhl is a member of the BU Investment Club