Corporate credit spreads are at levels not seen in decades. Investment-grade credit spreads, which measure how much more a top-rated company pays to borrow compared to the U.S. government, have fallen to 0.77%, a level last seen in 1998. Today’s credit spreads stand out for how tight they are compared to history, with companies paying a significantly smaller risk premium to borrow.

This week, Markets traded higher with gains across equities and bonds. The S&P 500 advanced alongside the Russell 2000 and NASDAQ, with factor leadership favoring Momentum and High Beta over Low Volatility and Value. International equities outperformed the S&P with emerging leading developed as the USD weakened. Treasury yields declined across the curve, most notably on the long end, causing long-duration Treasuries to outperform. Within corporate credit, IG outperformed HY as credit spreads held steady. Oil traded lower, while gold hit a record high. The VIX was flat, and bond market volatility declined after the August jobs and inflation reports increased the probability of a rate cut next week.

The Federal Reserve has kept interest rates unchanged this year due to concerns that tariffs could reignite inflation. This concern, strong job growth, and low unemployment gave the central bank time to wait for more data. However, the Fed’s policy stance was tested in early August when the July jobs report showed U.S. employers added fewer jobs than expected and unemployment rose to 4.2%. The report suggested that high borrowing costs are weighing on the economy and that the focus should be shifted from inflation risk to slowing economic growth.

This week, the markets rose broadly with small caps and cyclical sectors leading. The S&P 500 and Nasdaq returned ~+2% but underperformed the Russell 2000’s +4%, signaling a continued rotation into smaller companies. Growth outperformed Value, and High Beta led, while Low Volatility and Equal Weight lagged. International equities underperformed despite the U.S. dollar weakening. Treasury yields fell, boosting mid- and long-duration bonds. High-yield corporate outperformed investment grades as credit spreads tightened. Gold moved back toward record highs, oil edged higher, and the U.S. dollar weakened. Volatility declined, with the VIX and MOVE indices finishing lower.

This week was marked by risk-off sentiment as equities declined, led by weakness in mega-cap stocks and the Nasdaq, though small caps fell in line with the S&P 500 and equal-weight and defensive sectors outperformed. International equities held up better, Treasury yields rose with high-yield bonds outperforming investment grade, commodities were steady, the dollar strengthened modestly, and volatility increased across asset classes. Notably, Fed Chair Powell’s Jackson Hole speech struck a dovish tone, highlighting labor market risks and signaling openness to rate cuts as soon as September, sparking a sharp rebound in equities and renewed optimism in rate-sensitive sectors.

This week, the markets rallied on renewed risk-on sentiment. The S&P 500 reached a new record, but small caps led after a cool CPI print raised expectations for a September rate cut. International stocks also traded higher, with developed markets performing in line with the S&P 500 and emerging markets underperforming. Treasury yields rose across the yield curve, weighing on long-duration Treasury bonds. Corporate credit spreads edged lower, and high yield slightly outperformed investment grade. Oil and the US dollar changed slightly, while gold was traded lower.

This month’s chart shows how different withdrawal rates can impact a retirement portfolio’s lifespan. It assumes an individual retired in 2000 at age 65 with $500,000 and started taking monthly withdrawals. Each line reflects a different withdrawal rate between 4% and 8%, showing how the portfolio fared through age 85. While all scenarios start at the same point, the paths quickly diverge, especially during periods of market volatility. The chart illustrates how a retiree’s withdrawal strategy can determine whether the portfolio lasts or runs out.

This week, mega-cap stocks led with the Growth factor, and the Nasdaq index outperformed the S&P 500, while the Equal Weight S&P 500 underperformed. International equities outperformed U.S. equities, with developed and emerging markets outperforming the S&P 500 by nearly +2% as the U.S. dollar weakened. Bonds traded higher as Treasury yields rallied after a weak July jobs report, with the front end of the curve falling the most. Volatility expectations rose, with the VIX rising to mid-June levels before retreating.

Stocks climbed to new highs in July, with the S&P 500 and Nasdaq both logging six consecutive record closes late in the month. Investor sentiment improved after better-than-expected Q2 earnings and trade agreements with Japan and the EU, with tariff rates on the deals less severe than feared. However, by month-end, market leadership was top-heavy again, with the Magnificent 7 gaining over +5% after leading AI firms reported strong Q2 earnings. Volatility remained subdued for most of July.

This week, markets advanced with the S&P 500 rising 1%, outperforming the Russell 2000. Defensive sectors—including Utilities, Health Care, and Real Estate—led gains, while Technology remained flat. International equities surpassed U.S. counterparts, with developed markets outperforming emerging ones. Treasury yields declined, especially across intermediate and long durations, and credit spreads tightened, allowing high yield to match investment-grade returns. he VIX dropped to its lowest level in 2025, signaling rising investor confidence driven by improved market breadth, strong earnings, and trade policy progress.

Lawmakers recently passed the One Big Beautiful Bill Act (OBBBA). The bill makes permanent individual rates from the 2017 tax cuts and extends key provisions related to business capital expenditures. What impact could the bill have? History shows that tax changes don’t always deliver consistent results, with outcomes dependent on the overall state of the economy. While some past tax cuts led to strong economic growth, others occurred during or immediately before an economic slowdown. The OBBBA may offer a modest, short-term boost to economic growth, but its long-term effect will depend on other factors, such as interest rates, business confidence, and consumer strength.

This week, the markets traded cautiously with the S&P 500 stuck in a narrow trading range since the start of July. The Nasdaq, tech sector, and growth factor outperformed, while value, low volatility, and equal weight traded lower. Small ended the week with a slight loss, underperforming the S&P 500. Overseas, emerging markets outperformed both developed markets and the S&P 500. Rising Treasury yields weighed on long-duration bonds in fixed income, with the 30-year yield climbing sharply. Gold was changed a little, oil traded higher, Bitcoin set a record high early in the week, and the US dollar strengthened.