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The positive market sentiment is still fragile


The GDP contracted 1.5% in the first quarter and declined 3.9% in April. However, the market viewed these weak figures for the economy positively. They could lead to a moderate shift in the Federal Reserve after the increases expected during the summer: two of 50 bps. Minutes from the Fed's May meeting, released on Wednesday, showed majority-backed rate hikes of 50 basis points each in June and July to combat inflation. This eased market concerns about more aggressive action by the Fed that could lead the US economy into a recession. However, that positive sentiment is still fragile, as Fed members appeared to leave room to take more aggressive action if inflation persists at its current levels. Wall Street indices rose on Thursday in a broad rally on improving expectations for interest rates and on better results published by retail stores that eliminate fears that supply problems and inflation may have affected the whole sector.

Source: https://capex.com/en/overview/the-positive-market-sentiment-is-still-fragile
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