Markets continue to grapple with uncertainty, both at home and abroad. The most recent flashpoint came on June 21, 2025, when the United States launched an airstrike on Iran’s nuclear infrastructure. Though the event sparked concern about potential escalation, the market response was relatively calm. U.S. equities rose modestly the following Monday, and bond yields declined—a sign that investors may view the strike as a step toward long-term risk reduction.

This muted market response comes on the heels of a dramatic recovery. Following a sharp sell-off on Liberation Day on April 2, 2025, the S&P 500 rebounded more than 20% in just two months. Over the past 70 years, similar rallies have occurred only five other times, and in every instance, the market was higher over the following 12 months, with an average gain of 31%. What makes this rebound especially notable is the level of volatility surrounding it. Despite flat year-to-date returns, market swings have been intense. Seven of the ten best trading days this year happened within two weeks of the ten worst. In one April session alone, the market delivered a 9% gain—nearly a full year’s return in a single day. These kinds of sharp moves are a reminder that it is nearly impossible to consistently time the markets. It is better to control risk through asset allocation.

Complementing the recent rebound is the broadening of market leadership. Unlike recent years dominated by a handful of large technology names, the equal-weighted S&P is now nearly aligned with the traditional index. Broader participation often signals a healthier foundation and greater potential for sustained gains across sectors. International equities have also outperformed, drawing investor interest after years of under performance versus the U.S. markets. Infrastructure and fixed income continue to offer stability and income, providing further support for diversified portfolios.

At the same time, economic data continues to reflect a resilient backdrop, even amid ongoing uncertainty. Inflation is easing, with key measures like the Consumer Price Index (CPI), Personal Consumption Expenditures (PCE) and Producer Price Index (PPI) all trending lower since January. The labor market remains strong, with unemployment holding at 4.2% and job growth averaging 100,000 to 150,000 new positions per month. While the Federal Reserve left rates unchanged at its latest meeting, it continues to signal the possibility of two rate cuts later this year, though the exact timing remains uncertain.

Even as economic data improves, policy uncertainty continues to cloud the outlook. Tariff negotiations remain unresolved, with the average rate climbing from 2.3% around December 31, 2024 to as high as 15% as of June 23, 2025, leaving businesses in limbo. Several major companies have suspended forward guidance due to this lack of clarity, with many business owners saying they need to understand the rules with regard to our trade policy before they can define their own strategies.

Also in Washington D.C., the Senate is currently reviewing the “Big Beautiful Bill”—a sweeping package that aims to extend 2017 tax cuts, increase defense and border security spending, eliminate taxes on overtime and tips and reduce Medicaid spending. While the bill could have wide-ranging impacts, it does little to address the growing federal deficit and debt. Expectations are that the deficit will continue to expand, fueling some of the unease we have seen recently in the bond market.

In times like these, long-term discipline and diversification matter more than ever. Risk management is not about reacting to headlines—it is about maintaining a strategy aligned with your goals. Attempting to time the market has proven costly, while staying diversified, informed and invested remains one of the most reliable ways to navigate an uncertain environment. If you have questions about how recent developments could impact your plan, we are here to help.