Frankly, it is a miracle that inflation is this low. Markets have not fully metabolized the impact from the closure of the Persian Gulf.
I've seen reporting that energy prices won't return to pre-war levels this calendar year, even assuming an immediate return to the status quo basically right now (which seems unlikely).
I find the whole thing really confusing. The facts I can see with my own eyes suggest high inflation and this surely means no substantial rate cuts (which... the market has expected) if not reduced consumer spending and risk of recessions.
But the markets think everything is... fine? So... what are we missing here?
Markets is just gambling but the gamblers wear suits and pretend things are respectable.
It doesn't need to make sense, line just needs to go up. It works until it doesn't.
The current rally is extremely narrow, mostly just AI/Big Tech and chip stocks. But yeah, the "market" appears to believe that this will all be over soon, which seems unlikely to me.
You are missing that the current governance is very ready to print money to bailout any situation. The market can go down in nominal value but still up in dollar's.