Despite navigating numerous market turbulences over the last twelve months, including a significant downturn attributed to tariffs in April, the American stock market has managed to deliver impressive double-digit total returns since the last Thanksgiving holiday.
This period of market activity showcases a divergence in performance across various segments of the stock market. While some areas thrived, others struggled to maintain their footing or even experienced a decline.
Market Performance Overview
Over the past year, the U.S. stock market has shown considerable strength, achieving double-digit returns despite encountering notable volatility, such as the "tariff crash" in April. This resilience underscores a robust underlying economic sentiment or strong corporate earnings that have propelled market values upwards. The sustained positive performance offers a compelling narrative of recovery and growth in the face of economic headwinds.
The financial landscape has been a rollercoaster, yet investors have seen their portfolios grow substantially. The double-digit gains since last Thanksgiving reflect a market that has largely absorbed and overcome various shocks. This enduring upward trend is a testament to the adaptability and fundamental strength of the American equity markets, providing a positive outlook for future investments despite ongoing global economic uncertainties.
Sectoral Divergence in Growth
A closer examination of market segments reveals a clear disparity in performance. The technology sector, particularly the Nasdaq 100 and S&P 500 Growth indices, stood out as top performers, each reporting gains exceeding 20%. This highlights the continued investor confidence and rapid expansion within the tech industry, driven by innovation and increasing digital transformation.
In stark contrast, mid-cap and small-cap stocks, represented by ETFs such as IJH, IJJ, IJS, IJK, and IWM, IJT, IJS, faced a much tougher environment. These segments either remained flat or saw their values decrease, indicating a preference among investors for larger, more established companies, especially those in high-growth technology sectors, during periods of market uncertainty. This divergence suggests a flight to quality and growth, leaving smaller and mid-sized companies lagging.
