QtrendsWall Street rallies into June with the red-hot momentum trade delivering record gains, driven by AI-fueled buying and hopes of a war resolution. Meanwhile, inflation hits a three-year high, pushing Americans to burn through savings as income and spending power erode, raising recession fears despite a handful of stabilizing factors.
Wall Street enters June on a strong footing, with the momentum trade posting its best two-month gain on record. The AI rally supercharged markets in May, and investors are now looking ahead to potential catalysts including SpaceX's pre-IPO investment opportunities. Hopes that geopolitical conflicts will soon end have further bolstered sentiment, though questions remain about the rally's sustainability.
The key inflation gauge has worsened, hitting a three-year high and eroding Americans' income and spending power. Many households are now burning through their savings to keep up with rising costs. While a few stabilizing factors — dubbed the 'Three A's' — are keeping the U.S. economy afloat, analysts warn they may not be enough to stave off a recession.