It would be an understatement to say that the second quarter’s stock market performance was a mirror image of the first. After the threat of imposing sky-high tariff rates that would have resulted in curtailing trade with China, the President’s 90-day pause provided a parabolic boost to the stocks that had been hit hardest to start the year. The standoff and subsequent backing down with China was a preview for how trade negotiations have gone across the board, making it difficult for companies and the investment community to have a clear picture of how things will shake out in the long run.

Betting on the direction policy goes from here is neither a fruitful exercise nor one in which any reasonable market participant should expect to have good results. As a case in point, the average stock in the worst performing sector to start the year, Information Technology, was up roughly 20 percent for the 2nd quarter, outpacing the next best performing sector, Communication Services, by over 10 percent. This was a reversion back to the highly concentrated markets that have become commonplace since Covid as investors excitement about the prospects of Artificial Intelligence (“AI”) remain high.