Is The U.S. Equity Market Peaking?

2025-02-21 01:30:00 ET

Summary

• An analysis of the S&P 500 since 1965 suggests that the Federal Reserve is the most common factor that has triggered the end of sustained equity market rallies.
• In instances where the Fed, after embarking on a hiking cycle, kept interest rates elevated for a prolonged period, markets often could sustain their rally.
• So far, economic data show little sign of a hard landing. While labor market strength is moderating, overall conditions remain resilient.

By Han Peng, CFA, Director, Multi-Asset Research

Is the U.S. equity market peaking? Following double-digit returns for U.S. equities over the past two years, and with valuations now incredibly expensive, investors have become increasingly concerned about whether the equity market rally still has further to run or if markets have peaked....

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