The S&P 500 index experienced a 4.1 percent decline in April, following a ten percent rally in the first quarter of 2024, as the economic landscape became increasingly uncertain. Slowing economic growth, rising interest rates, and escalating tensions in the Middle East, sparked by Israel’s military action against Iran, contributed to the decline. Furthermore, the Federal Reserve’s forecast of three interest rate cuts as recently as late March have been pushed back.
The yield on the 10-year U.S. Treasury Note surged to 4.69 percent by the end of April, up from 4.20 percent at the end of March and 3.88 percent at the start of the year. This 81 basis point (0.81%) increase in just four months raises concerns about the Fed’s monetary policy, particularly given the rapid growth of U.S. government debt.