From Fortune:

The stock market has returned to form after a brief false start, reaching multiple record highs recently. The S&P 500 climbed 1.2% on Friday, hitting a record high of 4,839, while the Dow Jones Industrial Average and Nasdaq Composite also saw significant increases.

Investors anticipate the Federal Reserve ending its interest rate hiking campaign following cooling inflation, resulting in a more business-friendly environment.

Rob Swanke, senior equity strategist for Commonwealth Financial Network, suggests that stock market valuations have risen recently as investors project lower borrowing costs and improved earnings expectations. He believes there’s still room for growth and cautioned investors to manage expectations as interest rates remain higher than in early 2022.

Despite higher interest rates, investors are growing more risk-tolerant due to stronger-than-expected economic data. Retail sales reports and consumer sentiment readings indicate a resilient U.S. economy, which has defied recession forecasts in recent year.

Greg McBride, chief financial analyst at Bankrate, believes that easing inflation pressures and the prospect of lower interest rates have fueled investors’ appetite for risk. Stock market gains have been led by tech stocks, especially those benefiting from lower rates.

Semiconductor companies Taiwan Semiconductor, Nvidia, and AMD, as well as tech giants like Microsoft and Meta Platforms, continue to drive stock market gains in the midst of the AI boom.

The bull market is broadening out, reflecting the inherent strength of the market. The Russell 2000 index, tracking small cap stocks, has also joined the big tech advance, indicating positive signs for investors.

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