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S&P returns cool from first quarter’s hot start; index still over 9% YTD

Through the first half of 2017, the S&P 500 returned 9.3% on a total return basis. Among the stocks within the index, returns were overall higher in the first quarter compared to the second. The average return of an S&P 500 stock was 5.3% in the first quarter, while the second quarter was lower at 2.1%. Standard deviations of returns were slightly lower in the second quarter of the year at about 10%, vs. 10.9% in the first quarter.

Stocks rode the “Trump bump” in the first quarter on hope that the new administration would have positive impacts on the economy through tax and fiscal policies. First-quarter earnings were overall positive, offering some tactile support to the ever-higher valuations, while the index hit new records almost weekly well into June. The technology sector seemed to be the problem child for stretches in the second quarter as experts saw valuations that may have finally become overstretched. During the period, Apple, the index’s largest holding, returned 0.3%.

Despite the periodic turmoil, the index managed its best first half since 2013.