A strong economy and Fed rate cuts: The stock market wants to ‘have its cake and eat it, too’

“One swallow does not a summer make, nor one fine day”, as Aristotle once said.

The US labor market saw the best jobs growth of the year in June, but markets are still see a 100% probability of an interest rate cut at the Federal Reserve’s next meeting on July 30-31 and these hopes are helping to drive stocks to record highs.

Despite Friday’s pullback in stock prices on the better-than-expected payrolls data, the Dow DJIA, -0.16% still ended the week up 1.2%, the S&P 500 index SPX, -0.18% was up 1.7%, and the Nasdaq Composite index COMP, -0.10% rose 1.9%, leaving all three benchmarks within striking distance of their all-time highs.

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