U.S. Stock Market

Positive corporate earnings reports and stronger-than-expected forward revenue forecasts can support higher stock prices and make company valuations appear less expensive.

Labor market indicators such as payroll growth and the unemployment rate can send mixed signals for monetary policy: robust payroll growth suggests economic strength, while a rising unemployment rate can provide central banks a reason to consider cutting policy interest rates.

Cuts to a central bank's benchmark interest rate tend to boost economic activity and asset prices but can increase inflationary pressures; the U.S. Federal Reserve targets a 2% inflation rate.

Lower interest rates can stimulate economic activity and raise prices for investments while increasing the risk of higher inflation.

Expectations of future interest-rate cuts by the Federal Reserve can contribute to higher equity prices as market participants price in easier monetary policy.

Stronger-than-expected corporate earnings reports and positive forward revenue guidance can justify higher stock valuations and support further price gains for companies in the affected sector.