As the Fed raised interest rates by 75 basis points for the second straight month in July to tame the multi-decade high inflation, recession fears have intensified. In addition, the U.S. economy contracted for the second straight quarter this year, making many analysts believe that a recession has already arrived.
Despite the persistent economic headwinds, the S&P 500 closed July as its best month in two years with a 12% gain. Better-than-expected corporate earnings primarily kept investor sentiment upbeat.
