Volatility returned to the U.S. equity market in August. After two positive and generally calm summer months, a series of headline-worthy events caused a few abrupt downturns that, despite recouping some losses towards the end of the month, dragged the S&P 500 down -1.7% for the month. First, investors reacted to the inversion of the 3-month and 10-year Treasury notes. While this signal is ominous and sparked some recession fears, it provides no certainty that one is imminent. U.S. economic data remains fairly strong and some extraneous factors such as extremely low international yields and a general flight to safe assets may be deepening the yield curve’s inversion. The U.S. and China publicly exchanged rhetoric to intensify the trade conflict which raised fears that continued tariffs will affect both economies and the global economy. However, discussions are set to continue in September and both parties appear to be leveraging the media to increase pressure on one another at the expense of global markets. Everything surrounding this trade deal is still in question and its impact has mainly been seen in lower consumer confidence in the U.S. Economic output is still growing and the second quarter GDP growth rate released in August was 2.0%. While this rate is lower than the first quarter, it still shows solid positive growth driven by corporate profits and consumer spending.