"However, it is worth noting that the S&P 500's advance was not driven by expectations of an imminent policy pivot by the Federal Reserve, but rather by confidence that corporate earnings still have a solid foundation. The index's ability to remain in positive territory despite import prices rising 0.4% m/m, above forecasts and signalling a return of cost-push inflation pressures, suggests that the market has, to some extent, accepted a "higher for longer" interest-rate scenario, as long as growth and corporate cash flows remain intact."
"Notably, the S&P 500, the Dow Jones Industrial Average, and the Nasdaq all closed higher, with gains of 0.26%, 0.60%, and 0.25%, respectively. This pattern indicates that the session was neither a broad-based risk-on surge nor a speculative chase for growth. Instead, it reflects a more balanced market stance and an acceptance of the current monetary policy environment. In periods of strong risk appetite, the Nasdaq typically outperforms the S&P 500;"
S&P 500 rose 0.26% as multiple U.S. economic releases topped forecasts. Initial jobless claims fell to 198,000 versus a 215,000 forecast, pointing to a resilient labour market. Regional manufacturing indicators rebounded, with the Empire State at 7.7 and the Philly Fed at 12.6, showing improved manufacturing activity. The data indicate the U.S. economy remains stable and has not entered recession. Equity gains were driven by confidence in corporate earnings rather than expectations of a Federal Reserve policy pivot. Import prices rose 0.4% m/m, suggesting renewed cost-push inflation while markets appear to accept a higher-for-longer rate environment if growth and cash flows persist.
Read at London Business News | Londonlovesbusiness.com
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