Birch Hill Investment Advisors LLC
One International Place, Suite 770 | Boston, MA 02110
Phone: 617-502-8300 | Fax: 617-502-8310
Market Views
JUL 2026
US equities moved higher through the first six months of 2026, with the S&P 500 Index returning +10.2% through June 30th. The rebound followed a -4% decline in the first quarter after the Iran war’s start. The war has strained global oil supplies, driving energy prices higher and renewing concerns about inflation. Headline inflation, as measured by the consumer price index, jumped to 4.2% in May, well above the Federal Reserve’s 2% target. Higher prices and the rapid adoption of new technology have weighed on consumer sentiment, which remains near historic lows, although they have been a boon for corporate America. US markets climbed on strong corporate earnings, expectations for continued growth, and accelerating investments in artificial intelligence (AI). The outlook for the remainder of 2026 brightened considerably following the June 14th announcement that the US and Iran would negotiate a preliminary deal to end the war.
APR 2026
US equities were little changed while international equities advanced during the first two months of 2026. In March, all equity markets turned lower. In 2026, rapid technological investment and rising geopolitical volatility have complicated traditional economic and market cycles. As we move into the spring, four primary forces—the Iran conflict, a ʺwait-and-seeʺ Federal Reserve, the massive buildout of Artificial Intelligence (AI) infrastructure, and a shifting labor market—are presenting challenges and opportunities for investors.
JAN 2026
US equity markets delivered another impressive performance in 2025. The S&P 500 Index posted its third consecutive year of double-digit returns (+17.9%), driven mainly by a concentrated group of technology and communication services companies related to artificial intelligence (AI). Encouragingly, participation began to broaden later in the year, helping the S&P 500 Equal Weighted Index return a solid +11.4%. International markets also posted substantial gains, benefiting from lower starting valuations and improving economic stability.
OCT 2025
During the third quarter of 2025, US equity markets maintained their upward momentum despite volatility. The S&P 500 reached new highs, with a year-to-date return of over 14% as of September 30. This resilience is largely due to the easing of geopolitical tensions and economic concerns related to new tariffs. Solid corporate earnings growth has also helped. Another key driver has been the Federal Reserve’s shift to an accommodative monetary policy.
JUL 2025
After peaking in late February, the S&P 500 Index fell sharply, declining -18.9% into early April as proposed tariffs on key trading partners fueled uncertainty and raised recession fears. However, a 90-day pause on the most severe tariffs, along with a preliminary agreement with China, sparked a sharp rebound in equities through mid-June. Momentum faded again toward quarter-end as geopolitical tensions flared following US and Israeli attacks on Iranian nuclear facilities. Despite the turbulence, the S&P 500 Index posted returns of +10.9% for the second quarter and +6.2% year-to-date.
APR 2025
In the first quarter of 2025, fluctuating policies on trade and tariffs increased economic uncertainty and market volatility. US equities retreated, with the S&P 500 Index posting a return of -4.3%. Investors shifted their focus toward defensive sectors. Healthcare, consumer staples, and utilities outperformed while cyclical sectors like consumer discretionary and technology lagged. Likewise, small-cap stocks struggled, as reflected in the Russell 2000 Index’s -9.5% drop.
JAN 2025
In 2024, US equities delivered very strong gains, with the S&P 500 Index returning +25.0%. Technology stocks were a significant driver of this performance, led by the “Magnificent 7” – Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla. A JP Morgan analysis notes these companies collectively gained +48%, and contributed 55% of the S&P 500 Index’s price return. Other broad market indices produced lower but still strong results, with the S&P 500 Equal Weighted Index and the Dow Jones Industrial Average returning +13.0% and +15.0%, respectively. Smaller and mid-capitalization equities also had solid returns for the year (as seen in the market indicators box to the right).
OCT 2024
US stocks pushed higher in the third quarter. Returns were led by interest-rate-sensitive sectors such as utilities, real estate, financials and consumer staples on expectations of lower interest rates. Technology stocks, which powered most of the market gains earlier this year, lagged. All US large capitalization indices have had strong year-to-date returns through September. The S&P 500 Index returned +22.1% over the period, still outperforming the S&P 500 Equal Weight Index (+15.2%) and the Dow Jones Industrial Average (+13.9%). However, the latter two indices narrowed some of their underperformance in the third quarter.