Stock market rally faces headwinds amid strong economy, sticky inflation

But the rally could falter soon, as prices may not be able to ease to the Fed's 2% inflation target without additional rate hikes, the firm said.

"The fly in that optimistic ointment is the threat that a strong economy and declining inflation are mutually incompatible, and the Fed will be forced to keep raising rates in this scenario. Markets have gotten the 'peak Fed' call wrong 3 times so far; a fourth unforced error is not out of the question," DataTrek co-founder Nicholas Colas said.

Colas predicted that the rally in stocks will continue through the end of June, though the market could face a conundrum in the third quarter as inflation and Fed rate expectations become repriced.

United States United States Latest News, United States United States Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

This water tech stock can rally nearly 25% following 'transformative' acquisition, Goldman saysGoldman Sachs reinstated its buy rating on the stock.
Source: CNBC - 🏆 12. / 72 Read more »

Bernstein says buy this China-based personal finance stock that can rally nearly 60%The research firm and money manager initiated coverage at outperform.
Source: CNBC - 🏆 12. / 72 Read more »

Why stock-market investors should beware of chasing small-cap rallyA pop higher by beaten-down small-cap shares has bulls looking for a broader stock-mrket rally. One technical analyst says tread with caution.
Source: MarketWatch - 🏆 3. / 97 Read more »

Advice | More Americans own stocks. This is great for their financial future.Sixty-one percent of U.S. adults say they have money in the stock market, either as an individual stock, a mutual fund, or a self-directed 401(k) or IRA plan. It’s the highest level since 2008, writes Michelle Singletary in Advice.
Source: washingtonpost - 🏆 95. / 72 Read more »