Stock market outlook: Unsustainable melt-up possible with a hawkish Fed

surged 38% in the first half of the year, representing its best start to a year since 1983.

A melt-up rally in the stock market would be concerning to investors because such rallies are typically unsustainable and ultimately give way to painful losses on the other side, especially when valuations are already elevated. A resilient economy has muted skepticism, as evidenced by an increase in bullish responses to the AAII weekly investor sentiment survey.two more interest rate hikes are likely,The mismatch between what the market expects versus what the Fed is saying could represent downside for the stock market, especially if new inflation data proves to be sticky.

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