Your Capital Markets Snapshot: U.S. Economic Growth is Showing Signs of Slowing

U.S. economic growth is showing signs of slowing, with key indicators like retail sales and personal spending surprising to the downside. This slowdown comes amid heightened policy uncertainty, particularly around tariffs and government funding. Markets have reacted defensively, with sectors like health care and consumer staples leading, while technology and consumer discretionary sectors lag. The S&P 500 is negative for the year, as markets continue to consolidate after the last two years of over 20% growth. International equities continue to outperform their US peers, highlighting the importance of diversification in a portfolio context. Additionally, bond markets have seen support as Treasury yields moved lower, reflecting renewed market expectations of multiple potential Fed rate cuts this year. Despite these challenges, the U.S. economy started the year from a position of strength, and there are no immediate concerns of a looming recession.