How the stock market typically performs during the summer
Memorial Day weekend marked the unofficial start to summer in the U.S., a notable period for investors who like to, as the market adage goes, " sell in May and go away ." Interestingly, a look back over the last 50 years at the S & P 500 's performance shows the three-month stretch from the Friday before Memorial Day through to the Friday before Labor Day in September has mostly been positive for equities, according to Bespoke Investment Group. "The S & P 500's median performance during this period has been a gain of 3.7%, with positive returns 72% of the time," read a note from the firm. .SPX 6M mountain S & P 500, over 6 months In fact, a closer look at the numbers shows the gains are especially pronounced when the S & P 500 was already higher year to date heading into the period, with the benchmark notching a 4.3% gain on a median basis, with positive returns 74% of the time, the firm found. On the other hand, in the 15 years when the S & P 500 was lower on the year heading into the period, the index gained just 1.4% on a median basis, with gains 67% of the time. On a historical basis, at least, that suggests the summer months this year could be more challenging for stocks. On Friday, May 23, before the Memorial Day weekend, the S & P 500 closed lower on a year-to-date basis. On Tuesday, however, the broader index was last slightly higher for the year. Other Wall Street firms are already thinking gains could be capped this summer, given that investors won't be gaining any clarity around trade until the July tariff deadline. JPMorgan's Fabio Bassi, the bank's head of cross-asset strategy, said the S & P 500 could "remain rangebound, with limited short-term upside." However, others expect that means equity weakness is contained, especially if the stock market can get past some key hurdles around trade and the U.S. deficit. Canaccord Genuity's Michael Graham said he holds a neutral view on the short-term outlook for stocks, but said he sees "a pathway toward many of these risk factors dissipating later in the summer" if investors can avoid significant tariff volatility.
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The Hill
38 minutes ago
- The Hill
How Senate Republicans want to change the tax breaks in Trump's big bill
WASHINGTON (AP) — House and Senate Republicans are taking slightly different approaches when it comes to the tax cuts that lawmakers are looking to include in their massive tax and spending cuts bill. Republicans in the two chambers don't agree on the size of a deduction for state and local taxes. And they are at odds on such things as allowing people to use their health savings accounts to help pay for their gym membership, or whether electric vehicle and hybrid owners should have to pay an annual fee. The House passed its version shortly before Memorial Day. Now the Senate is looking to pass its version. While the two bills are similar on the major tax provisions, how they work out their differences in the coming weeks will determine how quickly they can get a final product over the finish line. President Donald Trump is pushing to have the legislation on his desk by July 4th. Here's a look at some of the key differences between the two bills: The child tax credit currently stands at $2,000 per child. The House bill temporarily boosts the child tax credit to $2,500 for the 2025 through 2028 tax years, roughly the length of President Donald Trump's second term. It also indexes the credit amount for inflation beginning in 2027. The Senate bill provides a smaller, initial bump-up to $2,200, but the bump is permanent, with the credit amount indexed for inflation beginning next year. Trump promised on the campaign trail that he would seek to end income taxes on tips, overtime and Social Security benefits. Also, he would give car buyers a new tax break by allowing them to deduct the interest paid on auto loans. The House and Senate bills incorporate those promises with temporary deductions lasting from the 2025 through 2028 tax years, but with some differences. The House bill creates a deduction on tips for those working in jobs that have customarily received tips. The House also provides for a deduction for overtime that's equal to the amount of OT a worker has earned. The Senate bill comes with more restrictions. The deduction for tips is limited to $25,000 per taxpayer and the deduction for overtime is limited to $12,500 per taxpayer. The House and Senate bills both provide a deduction of up to $10,000 for interest paid on loans for vehicles made in the United States. And on Social Security, the bills don't directly touch the program. Instead, they grant a larger tax deduction for Americans age 65 and older. The House sets the deduction at $4,000. The Senate sets it at $6,000. Both chambers include income limits over which the new deductions begin to phase out. The caps on state and local tax deductions, known in Washington as the SALT cap, now stand at $10,000. The House bill, in a bid to win over Republicans from New York, California and New Jersey, lifts the cap to $40,000 per household with incomes of less than $500,000. The credit phases down for households earning more than $500,000. The Senate bill keeps the cap at $10,000. That's a non-starter in the House, but Republicans in the two chambers will look to negotiate a final number over the coming weeks that both sides can accept. The House bill prohibits states from establishing new provider taxes or increasing existing taxes. These are taxes that Medicaid providers, such as hospitals, pay to help states finance their share of Medicaid costs. In turn, the taxes allow states to receive increased federal matching funds while generally holding providers harmless through higher reimbursements that offset the taxes paid. Such taxes now are effectively capped at 6%. The Senate looks to gradually lower that threshold for states that have expanded their Medicaid populations under the Affordable Care Act, or 'Obamacare,' until it reaches 3.5% in 2031, with exceptions for nursing homes and intermediate care facilities. Industry groups have warned that limiting the ability of states to tax providers may lead to some states making significant cuts to their Medicaid programs as they make up for the lost revenue in other ways. The Medicaid provision could be a flashpoint in the coming House and Senate negotiations. Sen. Josh Hawley, R-Mo., was highly critical of the proposed Senate changes. 'This needs a lot of work. It's really concerning and I'm really surprised by it,' he said. 'Rural hospitals are going to be in bad shape.' The House bill would allow companies for five years to fully deduct equipment purchases and domestic research and development expenses. The Senate bill includes no sunset, making the tax breaks permanent, which was a key priority of powerful trade groups such as the U.S. Chamber of Commerce. Republicans in both chambers are looking to scale back the clean energy tax credits enacted through then-President Joe Biden's climate law. It aimed to boost the nation's transition away from planet-warming greenhouse gas emissions toward renewable energy such as wind and solar power. Under the Senate bill, the tax credits for clean energy and home energy efficiency would still be phased out, but less quickly than under the House bill. Still, advocacy groups fear that the final measure will threaten hundreds of thousands of jobs and drive up household energy costs. The House bill would allow millions of Americans to use their health savings accounts to pay for gym memberships, with a cap of $500 for single taxpayers and $1,000 for joint filers. The Senate bill doesn't include such a provision. The House reinstates a charitable deduction for non-itemizers of $150 per taxpayer. The Senate bill increases that deduction for donations to $1,000 per taxpayer. Republicans in the House bill included a new annual fee of $250 for EV owners and $100 for hybrid owners that would be collected by state motor vehicle departments. The Senate bill excludes the proposed fees. ___
44 minutes ago
How Senate Republicans want to change the tax breaks in Trump's big bill
WASHINGTON -- House and Senate Republicans are taking slightly different approaches when it comes to the tax cuts that lawmakers are looking to include in their massive tax and spending cuts bill. Republicans in the two chambers don't agree on the size of a deduction for state and local taxes. And they are at odds on such things as allowing people to use their health savings accounts to help pay for their gym membership, or whether electric vehicle and hybrid owners should have to pay an annual fee. The House passed its version shortly before Memorial Day. Now the Senate is looking to pass its version. While the two bills are similar on the major tax provisions, how they work out their differences in the coming weeks will determine how quickly they can get a final product over the finish line. President Donald Trump is pushing to have the legislation on his desk by July 4th. Here's a look at some of the key differences between the two bills: The child tax credit currently stands at $2,000 per child. The House bill temporarily boosts the child tax credit to $2,500 for the 2025 through 2028 tax years, roughly the length of President Donald Trump's second term. It also indexes the credit amount for inflation beginning in 2027. The Senate bill provides a smaller, initial bump-up to $2,200, but the bump is permanent, with the credit amount indexed for inflation beginning next year. Trump promised on the campaign trail that he would seek to end income taxes on tips, overtime and Social Security benefits. Also, he would give car buyers a new tax break by allowing them to deduct the interest paid on auto loans. The House and Senate bills incorporate those promises with temporary deductions lasting from the 2025 through 2028 tax years, but with some differences. The House bill creates a deduction on tips for those working in jobs that have customarily received tips. The House also provides for a deduction for overtime that's equal to the amount of OT a worker has earned. The Senate bill comes with more restrictions. The deduction for tips is limited to $25,000 per taxpayer and the deduction for overtime is limited to $12,500 per taxpayer. The House and Senate bills both provide a deduction of up to $10,000 for interest paid on loans for vehicles made in the United States. And on Social Security, the bills don't directly touch the program. Instead, they grant a larger tax deduction for Americans age 65 and older. The House sets the deduction at $4,000. The Senate sets it at $6,000. Both chambers include income limits over which the new deductions begin to phase out. The caps on state and local tax deductions, known in Washington as the SALT cap, now stand at $10,000. The House bill, in a bid to win over Republicans from New York, California and New Jersey, lifts the cap to $40,000 per household with incomes of less than $500,000. The credit phases down for households earning more than $500,000. The Senate bill keeps the cap at $10,000. That's a non-starter in the House, but Republicans in the two chambers will look to negotiate a final number over the coming weeks that both sides can accept. The House bill prohibits states from establishing new provider taxes or increasing existing taxes. These are taxes that Medicaid providers, such as hospitals, pay to help states finance their share of Medicaid costs. In turn, the taxes allow states to receive increased federal matching funds while generally holding providers harmless through higher reimbursements that offset the taxes paid. Such taxes now are effectively capped at 6%. The Senate looks to gradually lower that threshold for states that have expanded their Medicaid populations under the Affordable Care Act, or 'Obamacare,' until it reaches 3.5% in 2031, with exceptions for nursing homes and intermediate care facilities. Industry groups have warned that limiting the ability of states to tax providers may lead to some states making significant cuts to their Medicaid programs as they make up for the lost revenue in other ways. The Medicaid provision could be a flashpoint in the coming House and Senate negotiations. Sen. Josh Hawley, R-Mo., was highly critical of the proposed Senate changes. 'This needs a lot of work. It's really concerning and I'm really surprised by it,' he said. 'Rural hospitals are going to be in bad shape.' The House bill would allow companies for five years to fully deduct equipment purchases and domestic research and development expenses. The Senate bill includes no sunset, making the tax breaks permanent, which was a key priority of powerful trade groups such as the U.S. Chamber of Commerce. Republicans in both chambers are looking to scale back the clean energy tax credits enacted through then-President Joe Biden's climate law. It aimed to boost the nation's transition away from planet-warming greenhouse gas emissions toward renewable energy such as wind and solar power. Under the Senate bill, the tax credits for clean energy and home energy efficiency would still be phased out, but less quickly than under the House bill. Still, advocacy groups fear that the final measure will threaten hundreds of thousands of jobs and drive up household energy costs. The House bill would allow millions of Americans to use their health savings accounts to pay for gym memberships, with a cap of $500 for single taxpayers and $1,000 for joint filers. The Senate bill doesn't include such a provision. The House reinstates a charitable deduction for non-itemizers of $150 per taxpayer. The Senate bill increases that deduction for donations to $1,000 per taxpayer. Republicans in the House bill included a new annual fee of $250 for EV owners and $100 for hybrid owners that would be collected by state motor vehicle departments. The Senate bill excludes the proposed fees.
San Francisco Chronicle
an hour ago
- San Francisco Chronicle
How Senate Republicans want to change the tax breaks in Trump's big bill
WASHINGTON (AP) — House and Senate Republicans are taking slightly different approaches when it comes to the tax cuts that lawmakers are looking to include in their massive tax and spending cuts bill. Republicans in the two chambers don't agree on the size of a deduction for state and local taxes. And they are at odds on such things as allowing people to use their health savings accounts to help pay for their gym membership, or whether electric vehicle and hybrid owners should have to pay an annual fee. The House passed its version shortly before Memorial Day. Now the Senate is looking to pass its version. While the two bills are similar on the major tax provisions, how they work out their differences in the coming weeks will determine how quickly they can get a final product over the finish line. President Donald Trump is pushing to have the legislation on his desk by July 4th. Here's a look at some of the key differences between the two bills: Tax break for families The child tax credit currently stands at $2,000 per child. The House bill temporarily boosts the child tax credit to $2,500 for the 2025 through 2028 tax years, roughly the length of President Donald Trump's second term. It also indexes the credit amount for inflation beginning in 2027. The Senate bill provides a smaller, initial bump-up to $2,200, but the bump is permanent, with the credit amount indexed for inflation beginning next year. Trump campaign promises Trump promised on the campaign trail that he would seek to end income taxes on tips, overtime and Social Security benefits. Also, he would give car buyers a new tax break by allowing them to deduct the interest paid on auto loans. The House and Senate bills incorporate those promises with temporary deductions lasting from the 2025 through 2028 tax years, but with some differences. The House bill creates a deduction on tips for those working in jobs that have customarily received tips. The House also provides for a deduction for overtime that's equal to the amount of OT a worker has earned. The Senate bill comes with more restrictions. The deduction for tips is limited to $25,000 per taxpayer and the deduction for overtime is limited to $12,500 per taxpayer. The House and Senate bills both provide a deduction of up to $10,000 for interest paid on loans for vehicles made in the United States. And on Social Security, the bills don't directly touch the program. Instead, they grant a larger tax deduction for Americans age 65 and older. The House sets the deduction at $4,000. The Senate sets it at $6,000. Both chambers include income limits over which the new deductions begin to phase out. More SALT The caps on state and local tax deductions, known in Washington as the SALT cap, now stand at $10,000. The House bill, in a bid to win over Republicans from New York, California and New Jersey, lifts the cap to $40,000 per household with incomes of less than $500,000. The credit phases down for households earning more than $500,000. The Senate bill keeps the cap at $10,000. That's a non-starter in the House, but Republicans in the two chambers will look to negotiate a final number over the coming weeks that both sides can accept. Medicaid providers The House bill prohibits states from establishing new provider taxes or increasing existing taxes. These are taxes that Medicaid providers, such as hospitals, pay to help states finance their share of Medicaid costs. In turn, the taxes allow states to receive increased federal matching funds while generally holding providers harmless through higher reimbursements that offset the taxes paid. Such taxes now are effectively capped at 6%. The Senate looks to gradually lower that threshold for states that have expanded their Medicaid populations under the Affordable Care Act, or 'Obamacare,' until it reaches 3.5% in 2031, with exceptions for nursing homes and intermediate care facilities. Industry groups have warned that limiting the ability of states to tax providers may lead to some states making significant cuts to their Medicaid programs as they make up for the lost revenue in other ways. The Medicaid provision could be a flashpoint in the coming House and Senate negotiations. Sen. Josh Hawley, R-Mo., was highly critical of the proposed Senate changes. 'This needs a lot of work. It's really concerning and I'm really surprised by it,' he said. 'Rural hospitals are going to be in bad shape.' Tax breaks for business The House bill would allow companies for five years to fully deduct equipment purchases and domestic research and development expenses. The Senate bill includes no sunset, making the tax breaks permanent, which was a key priority of powerful trade groups such as the U.S. Chamber of Commerce. Clean energy tax credits Republicans in both chambers are looking to scale back the clean energy tax credits enacted through then-President Joe Biden's climate law. It aimed to boost the nation's transition away from planet-warming greenhouse gas emissions toward renewable energy such as wind and solar power. Under the Senate bill, the tax credits for clean energy and home energy efficiency would still be phased out, but less quickly than under the House bill. Still, advocacy groups fear that the final measure will threaten hundreds of thousands of jobs and drive up household energy costs. Odds and ends The House bill would allow millions of Americans to use their health savings accounts to pay for gym memberships, with a cap of $500 for single taxpayers and $1,000 for joint filers. The Senate bill doesn't include such a provision. The House reinstates a charitable deduction for non-itemizers of $150 per taxpayer. The Senate bill increases that deduction for donations to $1,000 per taxpayer. Republicans in the House bill included a new annual fee of $250 for EV owners and $100 for hybrid owners that would be collected by state motor vehicle departments. The Senate bill excludes the proposed fees.
