The Stock Market Fought the Fed—and Paid the Price

Don’t count your chickens, they say, at least not until they’ve hatched. That’s something the stock market keeps forgetting every time it rallies into a Federal Reserve pivot that remains a long way from happening.

For the early part of this past week, a bad-news-is-good-news mentality ruled as each “disappointment” was greeted with a surge. Fueled by data showing softer manufacturing activity and a sharp decline in job openings, the


S&P 500


put together a 5.7% jump on Monday and Tuesday—the index’s largest two-day gain since April 2020, when stocks were in the early innings of the rebound from the Covid-19 bear-market low. And why not? A weaker economy and a slowing labor market could mean slower inflation and thus fewer rate hikes from the Fed.