The S&P 500 hit fresh record highs last week as stagflation concerns receded, according to Deutsche Bank analysts. The index climbed 1.43% to notch its ninth consecutive weekly gain, the longest winning streak since 2023. The rally was fueled by declining oil prices and growing market optimism surrounding a potential US-Iran diplomatic agreement.
Lower energy costs have alleviated investor worries about persistent inflation combined with slowing economic growth, a toxic combination known as stagflation that threatens both corporate earnings and Federal Reserve policy flexibility. The consecutive weekly advances signal sustained bullish momentum across equities as traders grow more confident about the macroeconomic backdrop. Deutsche Bank’s analysis suggests the combination of easing commodity pressures and geopolitical progress has created a favorable environment for risk assets.
FXnCO Insight
Traders should monitor oil price movements and US-Iran negotiations closely, as any reversal in either could quickly reignite stagflation fears and threaten the current equity rally.
Source: FXStreet