The Federal Reserve (Fed) kept interest rates unchanged after its Federal Open Market Committee (FOMC) meeting earlier this month. Although investors and economists largely expected this outcome, stocks and bonds sold off immediately after Fed chair Jerome Powell’s post-meeting news conference.

It’s been a busy start to the year for investors, as shifting geopolitical risks and rising economic uncertainty led to choppy returns for stocks. Concerns about AI spending and profitability hit technology stocks especially hard. However, other sectors like financials and consumer discretionary have also seen losses to start the year.

While stocks experienced a roller-coaster ride powered by policy uncertainty, fixed income generally held up well despite the broader market turbulence. Will it be the same story in the second half? Let’s take a closer look.

September was a solid month for investors, capping off a strong quarter for markets. Falling interest rates helped support stock returns, with the S&P 500 and Dow Jones Industrial Average setting new record highs during the month. Even bonds were up, marking five straight months with positive fixed income performance.

March was another positive month for markets, continuing the rally to start the year. Improving corporate fundamentals and a supportive economic backdrop drove solid single-digit returns for U.S. markets during the month.

Throughout 2022, high levels of volatility across all major asset classes created a difficult environment.