Debt ceiling negotiators inched towards a deal that would cap increases in federal spending.
Two more Fed presidents signaled that rate hikes may not be finished, and hot inflation data supported the notion.
More companies mentioned AI on earnings calls than any quarter in ten years, driving optimism over the technology.
Market Review: AI optimism and inflation pessimism
Broad stock returns were subdued; the S&P rose 0.3% for the week, and small to mid-cap stocks lost ground slightly.
Large growth stocks carried the week as technology stocks rose 4.6%, driven by artificial intelligence hype.
Bonds lost money as the market reacted to higher inflation.
Outlook: Uncertainty – volatility and opportunity
The frenzy over AI feels familiar to the dotcom frenzy. Pets.com went bankrupt nine months after raising $82.5 million in a February 2000 IPO. “Everything AI” is on a tear, but which companies will thrive remains the question.
Most stocks, however, are not faring well. The S&P 500 is up 10% for the year, but the equal-weighted S&P 500 is actually down over 1%, such narrow leadership does not bode well for returns going forward.
OneAscent portfolios include allocations that may do well in a tech-driven rally and positions which may hold their value if AI gains evaporate. Importantly, we are prepared to take advantage of volatility rather than be a victim of it.
Political Polarization has increased significantly
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 Source: Factset  Source: Investopedia  Source: Pew Research The shift in the American public’s political values | Pew Research Center  Market Returns reference the following indices: Large Cap – S&P 500, Mid Cap Growth – Russell Midcap growth, Mid Cap Value – Russell Midcap Value, Small Cap – Russell 2000, Developed – MSCI EAFE, Emerging – MSCI Emerging Markets, Aggretate – Bloomberg US Aggregate, High Yield – Bloomberg High Yield