Want to stay informed with market insights and investing ideas from Morningstar? Sign up for my weekly Smart Investor newsletter here.

This week’s highlights:

While there was plenty of news for investors to digest, the headline for the stock market was that it was a quiet week. Still, quiet is fine for a market that saw intense volatility this spring and is now up 13% since 2025 began.

There’s no question that we are witnessing a historic level of investment in AI, which has been fueling massive gains in semiconductor stocks. However, the stock market is forward-looking, and it’s not enough for something to simply grow. Future growth must increase, or at the very least sustain itself. As Hansen explains, there are glimmers of concern about whether investments in semis can continue their heady growth, or if the so-called base effect will kick in and slow growth. Hansen checked in with Morningstar analysts for their outlook on semiconductor spending. Here’s the takeaway.

The other big driver in the markets is Fed interest rate cuts. The Fed’s first cut this year has sent short-term bond yields lower, but long-term yields are staying elevated. In Wall Street lingo, this is known as a yield curve steepening. Hansen explains this trend and the opportunities – and potential risks –it presents to bond investors.

The Fed was cited in another great piece this week, as Amy Arnott weighed in with an overview of the stock market. Arnott looks at seven key market indicators and concludes that a measure of caution is warranted for investors. Find out why here.

Lastly, Susan Dziubinski checks in on dividend growth stocks and screens for undervalued names. She’s got ten for your watchlist, ranging from a lithium producer to a household-name footwear and apparel maker.

Tune in next week as we wrap up the key trends in the markets for the third quarter and kick off the home stretch of 2025 with what is certainly going to be a closely watched September jobs report on Friday.

As always, be sure to visit our Markets page for our latest coverage and live stock market updates, along with our full weekly calendar of key upcoming data and events.