Are markets ignoring underlying risks in hopes of more Fed cuts? US stocks keep breaking barriers: The S&P 500 crossed 6,500 and the Dow reached new records, propelled by a 3.3% GDP rebound and resilient consumer spending—even as tariff-induced inflation looms. AI optimism and blockbuster earnings from Nvidia and Snowflake are keeping tech stocks hot, though nervousness lingers over the sector’s future in China and exposure to key customers.
Yet this rally is unfolding as Washington wages open war on Fed independence. President Trump’s announcement firing Fed Governor Lisa Cook—and her subsequent suit to challenge it—marks a historic clash over central bank autonomy (NYT). Markets have proved uncannily calm, with the “TACO trade” thesis (“Trump Always Chickens Out”) holding—for now. But how long will traders keep betting on business as usual
while fundamentals shift?
