Nevertheless, second quarter corporate earnings helped push U.S. markets out of their malaise, with a greater-than-expected number of companies beating expectations.
Meanwhile, Federal Reserve Chair Janet Yellen revealed confidence in the economy and the outlook, projecting a potential tapering of its $4.5 trillion bond stash to begin sometime this year and wind down in 2022. The Fed, though, will still maintain its low interest rate in face of a stubbornly depressed inflation level that remains below its 2% target.
The markets were also slightly subdued due to political uncertainty after the Trump administration’s failure to push through health care reform or a replacement for the Affordable Care Act. Many observers saw the failure as a sign of trouble for the administration’s ability to enact its pro-growth economic agenda, including tax cuts and increased fiscal spending.
The market rally slightly leveled out in the final weeks of July as traders engaged in the time-honored tradition of profit taking after a record run-up in U.S. markets.
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