1. U.S. stocks near record highs, adding market risk due to high valuations. 2. Earnings growth contributed over half of S&P 500's 14% YTD gain. 3. Inflation and jobs data may challenge expectations for rate cuts. 4. S&P 500 targets raised, predicting further growth amidst high valuations. 5. Healthy economy is crucial for continued earnings growth and market stability.
Despite high valuations, a history of positive returns during Fed rate cuts suggests potential for continued growth in SPY’s price. For example, past scenarios where the Fed initiated rate cuts amidst economic growth led to median returns of 15% over 12 months.
The article highlights conditions that could influence SPY’s price action, such as earnings growth and market valuations. Given the relevance of the S&P 500 movements to SPY, factors discussed are critical for SPY investors.
Upcoming inflation and jobs data will significantly affect market sentiment in the near term and influence SPY’s performance. Historically, immediate market reactions following major economic data releases have been pronounced.