The first quarter brought some long overdue volatility to equity markets. Indeed, the S&P 500 Index’s relatively modest decline of 0.8% belies the underlying tumult during the quarter. Markets started the year where they left off in 2017, with the S&P 500 Index gaining 5.7% in January and cruising to new all-time highs. However, things quickly changed in February as the S&P 500 Index declined 3.7% and snapped its longest monthly winning streak since 1959 according to CNBC.

The current bull market completed its ninth year with astonishing gains. The S&P 500 Index gained 21.8% while the Russell 2000 Index advanced 14.7%. The Nasdaq was even more impressive, setting a record 72 new closing highs during the year and finishing with a 29.6% gain. In addition, the rally was largely uninterrupted and characterized by very subdued volatility. On a total return basis, the S&P 500 Index didn’t have a single down month during the calendar year for the first time since 1927.

The market posted another quarter of solid gains, with the S&P 500 Index up 4.5% and the Russell 2000^® Index advancing 5.7%. Year-to-date returns are an impressive 14.2% and 10.9% respectively. The Dow Jones Industrial Average finished the quarter with eight consecutive quarters of gains, its longest positive streak in 20 years.

Equities added to their gains in the second quarter. The S&P 500 Index advanced 3.1%, bringing its year-to-date gain to 9.3%. Solid corporate earnings reports seemed to support gains. In fact, first quarter earnings growth for the S&P 500 was the highest in six years. This supported the thesis we espoused last quarter for a hand off to an earnings driven market.

After a strong finish in 2016, stocks continued to march higher in the first quarter of 2017. The S&P 500 Index finished up 6.1% in the first three months of the year, surpassing other domestic indices (the Russell 2000 Index gained 2.5% during the quarter).