S&P 500 Near Record as Investors Brace for Key US Data

This article first appeared on GuruFocus.

The recent rally that carried the S&P 500 (SPY) to within striking distance of a record has slowed into a more measured advance, with futures edging higher after a strong two-day run. Investors are now turning their focus to a dense slate of US economic data, beginning with retail sales, to gauge whether resilient household spending can persist despite elevated living costs and a still-fragile employment backdrop. After last week’s AI-driven selloff and rebound, markets appear to be entering a pause, with upcoming readings on growth, inflation and labor conditions likely to shape expectations around the Federal Reserve’s next steps.

Beneath the surface, stock-specific moves continue to reflect selective optimism. Ferrari NV (NYSE:RACE) and Spotify Technology SA (NYSE:SPOT) both climbed more than 5% following upbeat corporate updates, while Alphabet Inc. (NASDAQ:GOOG) moved to raise at least $9.4 billion through sterling- and Swiss franc-denominated debt after a large US issuance. In rates markets, Treasuries firmed, pushing the 10-year yield down to around 4.18%, as the dollar steadied following recent declines. Derivatives pricing continues to point toward two Federal Reserve rate cuts in 2026, with the first potentially arriving under new leadership after Jerome Powell steps down in May, a transition that has fueled debate over whether Kevin Warsh would bring a more hawkish tilt.

Outside the US, political and policy developments added further texture to the global picture. UK government bonds rallied as Prime Minister Keir Starmer reinforced his position, easing concerns over leadership instability and weighing modestly on sterling. Japanese equities extended record highs, supported by optimism that increased fiscal spending under Prime Minister Sanae Takaichi could lift corporate earnings, while long-dated Japanese bond yields declined. In China, the yuan strengthened to its highest level since May 2023 after regulators asked banks to limit holdings of US Treasuries, reinforcing a broader diversification trend that could accelerate capital repatriation into domestic assets.