Market Commentary: Q1 2024

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Strong performance spread throughout the financial markets in the first quarter of the year driven by resilient economic growth, optimism around artificial intelligence (AI), and expectations for future interest rate cuts by the Federal Reserve. With the first quarter closed and NCAA March Madness brackets inevitably “busted,” let’s take a closer look at how the economy and markets performed to kickstart 2024.


Inflation accelerated in March for the third straight month, keeping prices painfully high for many Americans, which may lead to the delay of any interest rate cuts by the Federal Reserve. The Labor Department reported on Wednesday, April 10th that the consumer price index (CPI), a broad measure of the average price of everyday goods, rose 0.4% in March from the previous month. Prices climbed 3.5% annually from the same time last year, above the 3.2% annual figure recorded in February (Chart 1). 

Chart 1: Inflation over the Decade: Annual CPI Inflation from 2010 to 2024

Source: U.S. Bureau of Labor Statistics 

Over the last couple of years, widespread expectations of an economic recession have followed the steepest interest rate hikes in the last 40 years. These record-breaking hikes were a direct response to the inflationary period that spiked in 2021 and peaked at 9.1% in mid-2022. With that said, the U.S. economy has avoided a recession thus far, remaining resilient despite the highest interest rates in the last few decades. 

The unemployment rate rose to 3.9% in February (Chart 2). Zooming out, unemployment has now been below 4% for 24 straight months, the longest stretch since the 1960s. 

Chart 2: MSCI All Country World Index from Q1 2024

Past performance does not guarantee future results.

The Fed’s short-term rate currently ranges between 5.25% and 5.5%, a 23-year high. Coming into 2024, it was proposed that maybe we’d see six rate cuts this year. These expectations have been tempered as inflation was firmer than expected in Q1, while the U.S. economy has remained resilient to these current higher rates. The Fed is now currently forecasting two to three rate cuts by the end of this year.

Market Summary

Quarter 1 & Year-to-Date 2024 Index Returns

Past performance does not guarantee future results.

Invest Where it Really Counts

As we venture into the second quarter of 2024, we’ll likely see the media’s focus from economic perspective on election campaign rhetoric, Q1 corporate earnings, interest rate reduction(s) by the Fed, and the ongoing turmoil in Ukraine and the Middle East. Our team is prepared to navigate you through any volatility that may arise. We thank you for trusting Petersen Hastings Wealth Advisors to help you discover where you’re most invested in life and build you the financial freedom to live it.