This Stock Market Rally Has Run on Both Faith and Fact. One Has Mattered More.

The current U.S. rally, which has taken the more than 16% higher from its March nadir, seems built on a combination of both: facts, in the form of soaring corporate earnings, a solid labor market, and a supportive underlying economy; and faith, in the form of a long-awaited peace deal in the war with Iran. On the hope side, reports of fresh talks between Washington and Tehran have driven a good portion of the market’s overall sentiment, while impressive earnings, a robust job market, and the underlying mechanics of President Donald Trump’s One, Big, Beautiful Bill Act have supported its fundamentals. “The shape of the current war is largely in Iran’s hands (and) investors have few insights into Iranian policy making.”