It is almost like tariffs never happened.

Stocks erased all of 2025 losses, as the S&P 500 is now only 4% off its all-time high. Yesterday’s cooler-than-expected inflation ignited the risk appetite even further on Wall Street. The White House also announced Saudi Arabia’s commitment to invest $600 billion in a series of deals with the U.S.

Not only that, Nvidia and AMD said they will supply semiconductors to Saudi Arabian firm Humain for a massive data-center project.

In short, there was plenty of positive news.

Speaking of inflation, Trump restarted his attack on Fed Chair Jerome Powell to lower interest rates after the consumer price index showed the 12-month inflation rate at 2.3%, its lowest since February 2021.

• “No Inflation, and Prices of Gasoline, Energy, Groceries, and practically everything else, are DOWN!!!” Trump wrote on Truth Social.
• “THE FED must lower the RATE, like Europe and China have done. What is wrong with Too Late Powell?”

During the event in Saudi Arabia, Trump cited an “explosion of investment and jobs” in the US as the reason why the stock market is “gonna go a lot higher.”

Investors are now forced to decide if they should chase the rally. Listen, Bank of America’s survey of fund managers showed that they were a net 38% underweight in US stocks (the most in two years), so they must ponder whether it’s time to jump back into the market.

After all, FOMO is a powerful emotion.

JPMorgan Chase boosted its US growth forecast after the truce deal between the US and China. The bank previously forecasted a recession in 2025. John Kolovos at Macro Risk Advisors pointed out that there are no major resistance levels left for the S&P 500 until 6,144 — the all-time high.

He pointed out that the benchmark index blew past its 200-day moving average so investors may be more likely to buy dips from now on.

• “The S&P 500 trading above the 200-day moving average is another indication that the trend is turning positive,” Kolovos said.
• “This increases the odds that pullbacks will be met with increased demand or buying interest. It changes your strategy and sends the signal that we’re done with the bear market.”

Josh Jamner at ClearBridge Investments believes the coast is clear for stocks to keep rising as traders close their hedging positions. Why? More trade deals are likely to be struck over the next few weeks, along with the new spending bill.

• “Like the Fed, investors are likely to look through today’s report as the prospect of trade deals and details on the budget reconciliation process are more material drivers for equities in the coming weeks,” said Josh Jamner at ClearBridge Investments.
• “However, the absence of a negative with today’s print does lend to incremental upside for risk assets as hedges are unwound.”

Clearly, the short-term sentiment is bullish on Wall Street.