Stock Market Paradox Bad News Can't Shake Popular Stocks

29 Jul 2025 · 1 min

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In this market commentary, the speaker argues that popular equities such as the S&P 500 and NASDAQ continue to hover near all‑time highs despite a cascade of negative macro news—including new tariffs, a growing fiscal deficit, slowing economic growth, and heightened geopolitical tensions. The underlying reason, according to the speaker, is that investors anticipate a more accommodative Federal Reserve or additional stimulus in response to any adverse surprise, which discourages a reassessment of fundamental risks. Consequently, market movements are being driven by momentum and sentiment rather than underlying fundamentals, a situation the speaker warns should concern market participants.

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There is no such thing as bad news for the popular stocks. And despite a barrage of negative news concerning tariffs, a swelling fiscal deficit, slowing growth, and heightened geopolitical risks, the S&P 500 and NASDAQ remain near all-time highs. Like nothing can make this market stumble, it appears. No matter what, things just keep going up. We think that's something you should be concerned about. And part of the reason is this, because they think that any negative surprises are expected to lead to a more accommodative Fed or more stimulus rather than— and which is only going to put off people reassessing fundamental risks. In other words, logic has left the building. Motion and momentum, not fundamentals, are in the driver's seat.