Stock Market Recovery Complete, Here's Why

The stock market has staged a remarkable recovery, swiftly rebounding from a sharp selloff to resume its bullish trend. This turnaround has been fueled by a confluence of positive economic reports that underscore the resilience of the U.S. economy. Strong growth in personal income has empowered consumers to keep spending, a critical driver of economic activity. Meanwhile, forward-looking estimates point to robust GDP growth for the current quarter, dispelling earlier concerns of a recession. Corporate earnings have also played a pivotal role, with companies delivering stronger-than-expected profits and forward earnings hitting new all-time highs. Adding to the optimism, inflation pressures have eased, with key measures trending closer to the Federal Reserve's 2% target and so far defying predictions of tariff-driven price spikes. Price declines in categories like vehicles and apparel further highlight this unexpected cooling. Together, these factors—rising incomes, solid growth prospects, record profits, and tame inflation—have completed the stock market's recovery and set the stage for continued strength.