S&P 500 futures are barely moving this morning after the index itself hit an all-time high yesterday, poking its head above 6,300 for the first time ever and closing at 6,305.6.
In Asia and Europe, there was a small amount of profit-taking earlier today but nothing to be concerned about—equities remain mostly near their record peaks globally.
There is no excuse for this behavior, arguably. There are three bearish indicators that ought to be scaring investors right now: The U.S. is imposing a trade tax on the entire planet; President Trump has threatened the independence of the Federal Reserve; and Goldman Sachs just moved down its forecast for U.S. GDP in the second half of the year (to 1.1%).
But, as Goldman’s Christian Mueller-Glissmann told clients in a recent note seen by Fortune, the markets appear to be ignoring this and enjoying a “Goldilocks scenario” instead.
There are reasons to worry that stocks might be overpriced. Deutsche Bank’s Henry Allen pointed out recently that the Fed Funds futures speculators are betting in a way that suggests they expect an upcoming recession. “If we look at Fed funds futures as of last night’s close, we can see that just over 100bps of cuts are priced in over the next year to August 2026. That comes on top of 100bps already delivered between Sep-Dec 2024. So, if realised, that would be just over 200bps of cuts in two years. But historically, getting 200bps of cuts in two years has almost always required a recession,” he wrote in a research note.
Here’s a snapshot of the action prior to the opening bell in New York:
