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STAY AWAKE AND REMEMBER TINA

With a bunch of events on the calendar for the summer months, maybe investors should keep one eye open as they loll languidly by the pool this year.

To name a few, Mona Mahajan, head of investment strategy at Edward Jones, cited the end of 90-day reciprocal trade tariff pauses and the administration's ambitions to get its Big Beautiful Bill across the finish line in Congress in July.

Mahajan also pointed to the markets astonishing run up since early May.

"We moved pretty far, pretty fast," she said in an interview with Reuters this week, noting the S&P 500's .SPX more than 20% gain since the announcement of the pause on April 8 for the tariffs first unveiled on April 2.

"After that type of rapid move, we don't see stocks moving higher indefinitely at this pace. We could be poised for a period of consolidation, at least a little bit of sideways action," said Mahajan.

"In any given year there's two to three corrections, and especially in a year where there's elevated uncertainty. We could see another five, 10% type of correction."

But rather than staying placidly by the poolside, taking action may make more sense.

"We do think that type of volatility is a still an interesting opportunity for investors to add to portfolios, diversify, and get quality investments at better prices because, as we look towards the back half of the year and into 2026 we see a better environment shaping up," said Mahajan.

Specifically, the tax bill should be in place by then and provide some fiscal support while the Fed may have made some rate cuts and could still be cutting.

With that, since "companies and CEOs will have a little bit more clarity on taxes and tariffs, earnings growth has the potential to reaccelerate a bit in 2026."

"All of that is shaping up to be a positive backdrop for investors," Mahajan added. "We still like the theme of broadening market leadership, so make sure you have growth and value style investments."

Meanwhile, the strategist sees the Federal Reserve holding rates steady at its mid-June meeting next week. But her thinking is "that the Fed remains biased to move rates lower when they can."

So she sees the central bank making one or two rate cuts this year and potentially continuing to cut in 2026.

Many strategists and investors have voiced concerns that the wider U.S. deficit implied by Trump's Big Beautiful Bill could hurt demand for U.S. Treasuries, but Mahajan sees relevance in an old acronym TINA (There Is No Alternative).

"If you are interested in sovereign debt, the US market is the largest, most liquid, most regulated market in the world, still. It's offering about 4.5% for 10-years. For someone that's in retirement or near retirement, that's a pretty good yield to lock in," she said.

"If you're a pension fund, institution, foreign investor, and you're trying to find an alternative to a US Treasury bill, or the US Treasury markets, it's hard to find globally, anything that really can compare to that."

(Sinéad Carew)

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