S&P 500 Rallies on Tariff Removal Despite Lingering Stagflation Concerns

US stock indices recorded a notable rebound following the decision to strike down several trade tariffs, providing a much-needed boost to investor sentiment. The S&P 500 and other major benchmarks reacted positively to the trade policy shift, which is expected to lower costs for corporations and improve trade flow. However, the rally remains capped by persistent fears of stagflation as recent economic data points toward a slowing growth trajectory. Elevated Personal Consumption Expenditures (PCE) figures continue to signal sticky inflation, complicating the outlook for future Federal Reserve policy decisions. Investors are now balancing the optimism of improved trade relations against the risks of a stagnant economy coupled with high prices. Market analysts suggest that while the tariff news is a positive short-term catalyst, long-term sustainability depends on cooling inflation data.