The U.S. stock market continued to perform well in the second quarter, up 3% for the quarter and up 9% year to date.

Strong earnings drove the market higher with the bulk of the gains coming in late April and May as first quarter earnings reports outpaced even elevated expectations.  The overall earnings for the S&P 500 rose almost 14% compared with the quarter a year before.  This marked the second straight quarter of earnings increases, following five quarters of declines. 

Growth companies also drove the market higher with their innovative technologies and processes.  Technology leaders like Bezos, Zuckerberg, Gates and Cook are all working to expand into new areas and continue to increase returns for their shareholders.

The Federal Reserve Bank raised interest rates, as planned, in June for the second time this year raising the rate to 1.00% – 1.25%.  The Fed also announced plans to begin trimming its $4.5 trillion balance sheet towards the end of the year, unwinding the extraordinary stimulus it employed during the financial crisis.  Both these are key steps in normalizing the Fed’s involvement in the economy.

Economic data released during the quarter suggested continued growth, but not necessarily at a rate to allow double digit earnings growth.  Job growth remained on track, but at a slower pace and home sales picked up in May.  Overseas economies, particularly in Europe, appeared to be more stable.