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Stocks were down for the week as investors appeared to take some profits and traders parsed Fed Chair Jerome Powell’s Congressional testimony.

Markets Wobble 

Stocks had a rough start to the week, with the Dow, S&P 500, and Nasdaq each off more than one percent on Tuesday alone. Mega-cap tech stocks were under pressure as investors appeared to take some profits.

Markets clawed back much of their losses on Wednesday and Thursday, with the Fed Chair’s upbeat comments to the Senate Banking Committee boosting stocks. Chair Powell said that once the Fed was confident inflation was tracking “sustainably at 2%,” the Fed would consider cutting short-term interest rates. The S&P 500 and Nasdaq rallied, with the S&P hitting a record close.^1,2,3

Friday’s employment news threw some uncertainty into the mix. The economy added 275,000 jobs in February—exceeding the 198,000 expected—but wage growth slowed, and jobless claims edged up. Some investors saw that as a negative, while others viewed it as a “Goldilocks” moment—an economy that’s not too hot or cold. Stocks initially rallied on the news, but profit-takers appeared to arrive as the day progressed.^4,5

Footnotes and Sources

1. ^{The Wall Street Journal, March 8, 2024}
2. ^{MarketWatch, March 6, 2024}
3. ^{CNBC, March 7, 2024}
4. ^{CNBC, March 8, 2024}
5. ^{The Wall Street Journal, March 8, 2024}

If you owe federal taxes, you must pay by the April deadline. Remember, if you get an extension to file your taxes, payment is still due by the April deadline. If you can’t pay the total amount you owe now, you may be able to set up a payment plan.

Here are some choices for making your payment:

• Use Direct Pay: IRS Direct Pay is a free and secure way to pay directly from your checking or savings account.
• Pay by debit or credit card: If you don’t want to link a bank account, you can use your credit or debit card. Remember that you’ll have to pay a processing fee and may incur interest charges.
• Pay when you e-file: If you file your federal tax return electronically, you can pay directly from your bank account using electronic funds withdrawal.

*This article is for informational purposes only and does not replace real-life advice, so consult your tax, legal, and accounting professionals before modifying your tax strategy.

Tip adapted from IRS.gov⁵

Footnotes and Sources

5. ^{IRS.gov, December 1, 2023}

Stocks extended their tech-led advance last week as signs of a resilient and still-enthusiastic consumer boosted momentum.

Nasdaq Sets New High

Stocks traded in a narrow band early in the week but ended the five-trading sessions with a powerful advance.

While the Dow dipped lower, artificial intelligence (AI) names powered the gains in the S&P 500 and the Nasdaq Composite. The Nasdaq bobbed around the 16,000 level for most of the week before posting consecutive record highs on Thursday and Friday, surpassing its 2021 record. It was the last of the three major stock benchmarks to reach a record high this year.¹

Economic news also helped boost markets. The Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge, rose 0.3 percent in January versus December—and 2.4 percent on a 12-month basis. Both were in line with expectations. Stocks ticked up on Thursday following the release of the report.²

Consumers Remain Upbeat

With all the excitement over AI, it’s easy to overlook some key economic indicators that also speak to the underlying strength of the economy—specifically, consumer data.

In addition to the closely watched PCE report, an end-of-week consumer survey revealed that while sentiment softened in February, it remained near a 32-month high. Fresh data this week also showed an unexpected jump in personal income.

Finally, the PCE report also reflected an ongoing consumer shift from goods to services—a sign the economy continues to normalize after the pandemic. Since two-thirds of gross domestic product comes from consumer spending, these consumer-related metrics helped support the narrative that the economy appears to be gathering momentum.^3,4

Footnotes and Sources

1. ^{The Wall Street Journal, February 29, 2024}
2. ^{CNBC.com, February 29, 2024}
3. ^{MarketWatch.com, March 01, 2024}
4. ^{CNBC.com, February 27, 2024.}

This tax season, the IRS expects an uptick in tax-related scams. In most cases, IRS “phishing” scams come in the form of bogus phone calls and emails that claim to come from the IRS.

Remember, the IRS will never:

• Call you without mailing an official notice first.
• Demand that you immediately pay your taxes over the phone.
• Take a debit or credit card number over the phone.
• Threaten to call law enforcement or immigration services to arrest you for failure to pay.

*This information is not intended to be a substitute for specific, individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁵

Footnotes and Sources

5. ^{IRS.gov, November 20, 2023}

Stocks vaulted to new heights last week on the back of an artificial intelligence (AI) semiconductor company, marking investors’ belief that AI has the potential to transform the U.S. economy.

Stocks Rally to Record Highs

Stocks traded in a fairly tight range for the first half of the short week, yawning at the lack of economic data while awaiting earnings results from one key company that creates chips that power the artificial intelligence operations of many firms.

A strong Q4 corporate report and long-term message from Nvidia Corp. pushed the S&P 500 and Nasdaq to new closing highs on Thursday.

Nvidia’s market cap rose by $277 billion on the news, pushing it to a $2 trillion valuation. To put that in perspective, Nvidia’s market cap is now roughly the same size as Canada’s economy. Its 16% gain on Thursday was the largest one-day market cap increase by any U.S. company.^1,2

Remember, companies mentioned are for illustrative purposes only. It should not be considered a solicitation for the purchase or sale of any company connected with AI.

Footnotes and Sources

1. ^{MarketWatch.com, February 22, 2024.}
2. ^{US News & World Report, February 22, 2024.}

Taxpayers who work in the gig economy may benefit from a better understanding of how their work affects their taxes. Taxpayers who work in the gig economy may benefit from a better understanding of how their work affects their taxes.

Here are some things taxpayers should know about the gig economy and taxes:

• Money earned through this work may be taxable.
• There are tax implications for the company providing the platform and the individual performing the services. 

This income may be taxable even if the taxpayer providing the service doesn’t receive a Form 1099-MISC, Form 1099-K, or Form W-2. This income may also be taxable if the activity is only part-time or side work or paid in cash. 

*This information is not intended to be a substitute for specific, individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁵

Footnotes and Sources

5. ^{IRS.gov, April 7, 2023.}

Stocks fell last week as investors reacted to disappointing inflation updates and other economic reports that fell short of estimates.

Stocks Snap Winning Streak

Markets were quiet Monday but opened lower Tuesday in response to the January inflation report that showed higher-than-expected consumer prices. But stocks regained some momentum on Wednesday and rallied Thursday despite disappointing reports on both retail sales and industrial production for January.^1,2

News of higher-than-expected wholesale prices on Friday put investors back on edge and kept stocks from ending the week on a positive note. The weekly loss broke a five-week winning streak.³

Footnotes and Sources

1. ^{The Wall Street Journal, February 13, 2024.}
2. ^{CNBC, February 16, 2024.}
3. ^{The Wall Street Journal, February 15, 2024.}
4. ^{The Wall Street Journal, February 13, 2024.}

Natural disasters, such as hurricanes, earthquakes, or fires, can happen anytime, so preparing before disaster strikes is essential. Here are a few tips to help you prepare in case anything happens:

• Update Your Family’s Emergency Plans: Your emergency plans can include knowing where to go, where you keep all necessary documents and possessions, and what you need to be prepared for. Check up on the emergency plans for your home or business frequently because things can change.
• Create Digital Copies Of Important Documents: Most financial organizations, such as banks and insurance companies, provide digital copies of bank statements, tax returns, and insurance policies anyway, and keeping all these digital copies saved and organized is an excellent practice to get into. If you only have paper copies of important documents, scan them and save them securely to access them in an emergency.
• Document Valuables: Documenting valuables makes it easier to claim insurance and tax benefits after a natural disaster. A disaster loss workbook will help you compile a list of belongings and photographs that can make this process even more accessible for both the IRS and your insurance provider.

These tips may help you have everything you need ready in the case of a natural disaster or other emergency.

*This tax tip is for informational purposes only and is not a replacement for real-life advice. Consult your tax, legal, and accounting professionals for more specific information.

Tip adapted from IRS.gov⁶

Footnotes and Sources

6. ^{IRS.gov, March 8, 2023}

S&P Tops 5,000

At the start of last week’s trading, stocks faced downward pressure due to comments by Fed Chair Powell over the weekend, signaling that the Federal Reserve had no immediate plans to initiate interest rate cuts. Consequently, the yield on the two-year U.S. Treasury note, highly influenced by monetary policy, increased to its highest level in two months.¹

By the end of trading on Monday, stocks had regained a significant portion of their previous losses. Influencing this market rally were positive corporate earnings reports. This trend continued throughout the week, contributing to the overall market momentum. By Friday, 67% of the companies listed in the S&P 500 had released their Q4 results, and an impressive 77% of those companies exceeded earnings expectations.²

Investors expressed enthusiasm on Friday after a report indicating that December’s inflation was lower than initially anticipated. This positive news revitalized buying activity, resulting in the S&P 500 surpassing 5,000 for the first time.³

Footnotes and Sources

1. ^{The Wall Street Journal,February 4, 2024}
2. ^{FactSet.com, February 9, 2024}
3. ^{CNBC.com, February 9, 2024}

If you receive money for the use of your primary residence, you may have to report this rental income on your tax return; this means that the “vacation home rental” classification can apply to your home, even if you don’t own multiple short-term rental properties. The rental expense deduction is limited in the case of a property used as a home; the rental expenses can’t be more than the rent received. The rental income may not require reporting if you rent the house to your tenant for fewer than 15 days during the year.

A vacation home is a house, apartment, condominium, or other dwelling that you use to generate income, but you can also use it as a residence during the year. For tax purposes, it’s critical to divide the expenses of a property into personal and business purposes.

To report rental income and rental expenses, use Schedule E. In addition, rental income may be subject to a net investment income tax.

*This tax tip is for informational purposes only and is not a replacement for real-life advice. Consult your tax, legal, and accounting professionals for more specific information.

Tip adapted from IRS.gov⁴

Footnotes and Sources

4. ^{IRS.gov, September 25, 2023}