Wall Street traders are showing remarkable resilience in the face of intense uncertainty surrounding the US-China tariff war and inflation concerns. The market has experienced significant whiplash over the past week, with stocks closing near all-time highs on Friday despite a jarring day-to-day swing.
Investors have been driven by fear of missing out, resulting in steady buying across various assets. This pattern is emerging across multiple sectors, including bonds, credit, and equities. Even amidst uncertainty, traders are adapting to new information, as evident from the recovery of long-dated Treasury ETFs after a disappointing inflation report.
The market’s ability to process sudden shifts has been demonstrated once again. After falling 1% following the inflation report, a popular ETF was able to recover most of its losses by mid-week. Furthermore, soft retail data has revitalized bets on interest-rate cuts, providing a boost to stocks. The tech sector has shown particularly strong sentiment lately, contributing to the overall near-all-time highs closing.
Source: https://www.bloomberg.com/news/articles/2025-02-14