How Sustainable Is the Current Stock Market Rally? | Global News Avenue

The S&P 500 rose in a big rally on Monday as investors hope to recover from the index’s first correction in more than a year.

The S&P 500 S&P 500 rose 0.6% after soaring 2.1% on Friday, The best daily performance Since Donald Trump won reelection the day after he won. For the second consecutive day, more than 90% of the S&P 500 components are higher.

It is worth noting that Big Tech largely missed Monday’s rally. Tesla shares (TSLA) fell nearly 5%, while nvidia (NVDA) will almost 2% slide. letter(GOOG), Amazon (Amzn) and Yuan (Yuan) is also closed in red, while apple (AAPL) and Microsoft (MSFT) The tiny gains are omitted.

S&P 500 Index Slide in and correct This is the first time since last week of 2023. Investors have grown, worried that the Trump administration’s aggressive tariff policy could raise prices, grow slowly, and discourage investment and recruitment in the near term. Tariff headlines have made consumer confidence, a measure that has dropped to it in early March The lowest level since 2022. Now, consumers expect prices to be faster in the coming year, with the Fed working to restore inflation to a potential headwind of 2%.

Treasury Secretary Scott Bessent filed a lawsuit on Sunday for Trump’s tariffs, despite the turmoil they caused. “I’ve been in the investment business for 35 years, and I can tell you it’s normal to correct it,” Bessent told NBC. See the media On Sunday. In the long run, Trump’s tax and relaxation remediation advice will stabilize and strengthen the market, Bessent suggested.

What is needed for the rally

Morgan Stanley analysts conducted a similar assessment in a note on Monday. “We ultimately think that the market will focus on the positive aspects of Trump’s policy agenda, but this path will take time and is unlikely to get smooth,” analysts wrote.

Analysts were called “possible” by last week’s correction level rally, considering that stocks become Oversold Since last week of 2022. They also pointed out that in the second half of March, people increased their emotional signals and seasonal strength, which is a reason for optimism about the market outlook. In the long run, Weakened the US dollar and Lower treasury yield Some support for company revenue should be provided in the next few quarters.

However, as the market adapts to the market, volatility may last for a year Trump 2.0Morgan Stanley analysts are not confident about the correction’s ongoing rally.

“It’s not just a market that is overselling, to get more than tradable gatherings,” they wrote. “We firmly believe that the breadth of earnings revisions is the most important variable, and while we can see some seasonal strength/stability in the revision, we believe that it will take several quarters to resume a positive uptrend.”