Don’t Let Headlines Drive Your Investment Decisions
Markets Continue To Climb Despite Headlines
If you only followed the news over the past few months, you might assume the stock market had a difficult summer. Investors have had plenty to worry about. There are rising tensions in the Middle East, higher oil prices, persistent inflation concerns, and ongoing questions about whether the billions of dollars being poured into artificial intelligence will ultimately pay off. Yet despite those challenges, the S&P 500 entered August hovering near record highs.
So, what’s driving the market? The answer comes down to something that often gets overlooked amid the daily headlines: strong corporate earnings and a surprisingly resilient economy.
AI: The Story Has Changed
Artificial intelligence remains one of the biggest forces shaping today’s market, but investors are becoming more selective.
A year ago, simply announcing a large AI investment was often enough to excite Wall Street. Today, investors want proof that those investments are generating real results.
Technology leaders like Microsoft, Amazon, Alphabet, and Meta continue to spend hundreds of billions of dollars building data centers, developing AI platforms, and expanding cloud infrastructure. The question is no longer, “Who’s investing the most?” It’s now, “Who’s turning those investments into profits?”
Second-quarter earnings showed that companies demonstrating strong revenue growth, healthy cash flow, and meaningful AI adoption were rewarded by investors. Those spending aggressively without clearly showing returns faced much tougher scrutiny.
That’s actually a healthy shift for the market. While there will undoubtedly be periods of volatility as investors evaluate which companies are executing best, we continue to believe AI represents a long-term opportunity, not just for technology companies, but for businesses across nearly every industry looking to improve productivity and efficiency.
Earnings Continue to Impress
One of the biggest reasons we remain constructive on the market is that corporate America continues to deliver.
S&P 500 companies are on track for nearly 30% year-over-year earnings growth during the second quarter (excluding valuation adjustments from private investments such as Anthropic, OpenAI, and SpaceX).
Even more encouraging is that this strength isn’t limited to the largest technology companies. Excluding the “Magnificent Seven,” earnings growth is still tracking close to 20%, suggesting that the broader economy remains healthy.
Perhaps most importantly, recent stock market gains have largely been supported by stronger earnings, not simply investors paying higher prices for the same profits. That’s generally a healthier and more sustainable foundation for long-term market performance.
Inflation Isn’t Gone, But There Are Reasons for Optimism
Inflation remains one of the Federal Reserve’s biggest challenges. Geopolitical tensions, including the conflict involving Iran, have pushed energy markets higher at times, while a strong U.S. economy has kept upward pressure on longer-term interest rates.
Fortunately, there have also been encouraging developments. Renewed discussions aimed at improving shipping through the Strait of Hormuz, combined with softer oil demand from China, have helped offset some supply concerns and kept oil prices relatively contained. If those trends continue, inflation pressures could gradually ease in the months ahead.
Staying Focused on What Matters
It’s easy to become distracted by headlines, especially during periods of geopolitical uncertainty or rapid technological change.
But history reminds us that markets have consistently rewarded investors who stay focused on long-term fundamentals rather than short-term noise.
Today, those fundamentals remain encouraging:
- A resilient U.S. economy
- Strong corporate earnings
- Continued innovation driven by artificial intelligence
- Broadening participation across sectors
While we fully expect periods of market volatility, we continue to believe that a diversified investment portfolio remains the most effective way to navigate uncertainty while positioning for long-term growth.
Final Thoughts
There will always be reasons to worry. Markets climb walls of worry all the time. Rather than trying to predict every headline, successful investing is about staying disciplined, maintaining perspective, and focusing on the factors that drive returns over years, not days.
If you’re unsure whether your current investment strategy is positioned for today’s market environment, we’d welcome the opportunity to help. Contact Victory Wealth Partners to schedule a complimentary consultation and discover how a disciplined, fiduciary approach can help you pursue your long-term financial goals with confidence. Enjoy the last few weeks of summer and we will be back in September.
ASHLEY ROSSER, PRESIDENT
Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.
Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.
