The S&P 500 has extended its gain to 1% and the Nasdaq is now up by 1.6%.
The touted downtrend in the S&P 500 is breaking along with the 4000 level and the index is rising further above the 200-day moving average.
It's tough to contextualize what's happening here. The market is surely pricing in a softer Fed and Waller's comments on Friday are a part of that but it's also pricing in a soft landing and those two things are tough to square.
Overall, my sense is the market is feeling more comfortable that the 2010-2020 'normal' of persistently low inflation is looking more likely with commodity prices falling and slack beginning to appear in manufacturing. I think there was some understandable angst about shifting to a world of consistently higher inflation and that's fading, at least in investors' minds. Add in the usual dose of FOMO with plenty of money on the sidelines and here we are.
