The S&P 500 is up 18% so far this year, even after falling in August for its first monthly decline since February. The benchmark index rallied in the final week of the month, finishing near its monthly highs for the sixth consecutive month. Now investors are questioning whether stocks can continue defying expectations and hang onto this year’s gains.
Data last week showed that hiring cooled over the summer and that economic growth and price pressures remained modest, supporting the case for the Federal Reserve leaving interest rates unchanged from their 22-year highs at its Sept. 19-20 meeting. Officials will get a final reading on inflation the week before the meeting.
Traders are less certain about the Fed’s moves in November or December. Fed Chairman Jerome Powell has said the central bank would consider raising rates later in the year if the economy doesn’t slow enough to keep inflation from falling. Higher rates usually hurt risky investments such as stocks by giving investors safer alternatives, although this year has proven to be an exception.
Read the full story on The Wall Street Journal here.