The tech-heavy NASDAQ Composite, and key measures of mid-sized and small companies touched new highs in June.

Much of the underlying momentum can be traced to faster economic growth, rising corporate profits, and still-low interest rates.

Another factor that lends support–S&P 500 companies repurchased a record $189.1 billion of their own shares in the first quarter, according to S&P Dow Jones Indexes Senior Analyst Howard Silverblatt. He expects buybacks to remain strong through the rest of 2018.

But the Dow Jones Industrials and the S&P 500 Index failed to recapture their January highs. These indexes are made up of the nation’s largest companies, some of which derive a significant share of sales from overseas.

Though not far from the January highs, a strong dollar may be putting modest pressure on these stocks. Moderation in overseas growth may also be a factor.

Much of the uncertainty stems from escalating trade tensions between the U.S. and its major trading partners.

Free trade/fair trade–it’s a very complex issue that’s being fought with simple soundbites. The President believes America has not been treated fairly, and he is using his authority to selectively levy tariffs against offending nations.

It’s a risky strategy that may eventually break down barriers. Or, it could escalate into a series of retaliatory measures that impede the U.S. and global economy.

But a quick review of the economic data strongly suggests the noise from the trade headlines isn’t affecting the U.S. economy, and GDP growth in the second quarter appears poised to surpass 4%.

You may agree or disagree with the President’s actions. But the market, which is collectively made up of millions of large and small investors, hates heightened uncertainty. Tit-for-tat levies increase short-term economic uncertainty.

Currently, it has injected volatility and uncertainty into the headline-grabbing major averages.

Table 1: Key Index Returns

Source: Wall Street Journal, MSCI.com, MarketWatch, Morningstar
MTD returns: May 31, 2018-Jun 29, 2018,YTD returns: Dec 29, 2017-Jun 29, 2018
*Annualized,**in US dollars