Markets marched expeditiously higher in July as investor optimism increased on signs that inflation may be softening. The S&P 500 index (large-cap US companies) increased more than 9%, the best monthly return since 2020[1]. Inflation has been at the center of concern for most of the year, particularly its potential degrading impact on household optimism and spending. Additionally, investors are concerned that high headline inflation may force the US Federal Reserve to continue to raise interest rates aggressively in order to dampen demand for goods and services in an effort to control rising costs
[1] Source: YCharts