A crisis that saw the biggest bank busts since the Great Recession also shook investor confidence, as did worries over a potentially catastrophic fight over lifting the U.S. debt ceiling.
The narrow breadth of the S&P 500’s rally has been a concern for some investors, with just seven stocks – Alphabet, Apple, Microsoft, Amazon, Meta, Nvidia and Tesla – responsible for almost all of the index’s gains this year. Many investors view these stocks as safe bets in uncertain times. Their gains were also driven by excitement over advances in artificial intelligence.
More recently, however, the market’s gains have shown tentative signs of broadening out to other stocks.One reason for the calm in markets is investors’ belief that the Fed is unlikely to deliver many more of the rate hikes that shook asset prices last year.Investors have also been encouraged by evidence showing that the U.S. economy continues to be resilient in the face of the central bank’s monetary tightening, while inflation slowly cools. The U.S. Citigroup Economic Surprise Index shows U.S.