US Stocks Resist S&P 500 Drops of 2% or More in Best Run in Over a Year

Core Viewpoint - US stock investors remain resilient despite trade tensions, slowing growth, and high valuations, leading to a significant rally in the S&P 500 Index, which has reached record highs [1][2]. Group 1: Market Performance - The S&P 500 Index has gone 107 sessions without a drop of at least 2%, marking its longest stretch since July 2024 [2]. - The index has surged 34% since early April, adding nearly $16 trillion in market value [2]. - The S&P 500 has achieved 28 all-time highs this year through Monday, despite high unemployment rates [4]. Group 2: Investor Sentiment - Investors are currently willing to overlook negative news, although there are concerns about complacency potentially impacting the stock rally [4]. - Traders are confident that borrowing costs will be lowered, with expectations of a half-point cut in 2025 being nearly priced in [5]. - Fund managers invested nearly $58 billion into US stocks in the week through September 17, indicating strong market momentum [6]. Group 3: Economic Factors - Risks such as persistent inflation and a moderating job market are present, but they have not significantly affected market performance [3]. - The belief that the economy has weathered the worst of tariff policies and will benefit from improving corporate profits and the AI boom supports market resilience [5]. - Short-covering is identified as a contributing factor to the recent stock market movements [7].