Recent market performance also suggests the rally has become increasingly selective. While the index continues to outperform, strength has not been evenly distributed across US equities, with sector rotation and stock-specific performance playing a greater role than broad market participation. That could leave the index more sensitive to earnings surprises and shifts in macroeconomic sentiment.
“The index continues to benefit from expectations that the Fed will remain patient, but markets are entering a phase where earnings and macroeconomic data are likely to become more influential than monetary policy alone. If corporate results continue to support current valuations, the rally could extend further. However, weaker guidance or renewed inflation concerns could lead to higher volatility as investors reassess risk,” says Inki Cho, Senior Market Strategist at Exness.
Source: Original Article
