After reaching a mid-month low, the S&P 500 ended July with a gain eight times better than its long-term average and the best gain for any month since November 2020. The S&P 500’s 9.11% gain last month was the best result for July in the last 72 years.

The July 27, 2022, Federal Reserve Open Market Committee policy statement included the widely expected 75-basis-point increase in the Fed fund target range. During his press conference that day, Fed Chairman Jerome Powell said the U.S. was not in a recession, but as reported a day later, second-quarter GDP contracted 0.9% after falling 1.6% in the first quarter. Initially, the market reacted by assuming that this and relatively dovish comments from Powell suggested that the Fed’s tightening process might not be as severe as previously feared.

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