US Stocks are hitting one new high after another.
The Morningstar US Market Index is up more than 21% so far this year, having rebounded from an August swoon. The index is up about 65% since bottoming out in September 2022.
“We’ve been surprised to the upside by how resilient equity markets have been, even in the face of a lot of volatility over the last few weeks,” says Kristy Akullian, head of iShares investment strategy, Americas, at BlackRock. She points to uncertainty surrounding fiscal stimulus in China, rising geopolitical tensions, and a neck-and-neck presidential election in the United States. That’s not to mention stretched valuations, recent weakness in the technology sector, and fears of a consumer spending slowdown. “In theory, all those things would be flashing warning signals,” Akullian says. But the market has taken it all in stride.
What’s behind the powerful rally, and what could derail it? Strategists say a surprisingly strong economy has given investors confidence and helped send stocks higher, but they also warn that trouble during earnings season could disrupt the bull run.
Why Stocks Are Soaring
“The most important thing about why every market has stayed so strong, even in the face of so many uncertainties, is that economic data has surprised to the upside,” Akullian explains.
“The conversation about a recession, at least in the near term, is really off the table.”
Inflation has fallen dramatically over the past year, and recent labor market…
