Key takeaways
- Markets have largely taken current concerns in stride, suggesting that the fundamental backdrop has provided a strong enough foundation.
- Governments across most major economies continued to spend, which can find its way into corporate revenues and supports broader economic activity.
- Corporate earnings have been strong, with six consecutive double-digit earnings growth quarters for S&P 500 Index companies. The US economy has continued to show resilience.
A prominent television host recently asked me whether this is an Alfred E. Neumann market. The reference, of course, was to the Mad Magazine character and his famous line, “What, me worry?” It’s a fair question given the market’s continued advance in the face of what seems like a steady stream of concerns. My answer was yes, though with an important qualification.
It’s not as if there’s nothing to worry about. There’s always something to worry about. Currently, the geopolitical backdrop remains unsettled, with tensions in Iran shifting in and out of focus. In the UK, bond yields have moved higher as investors assess whether a potential political shift could bring back echoes of the sharp market dislocation seen during the brief Liz Truss era.1 In Japan, policymakers have stepped in to support the yen, while also preparing markets for the likelihood of additional rate hikes.2 Each of these developments can carry implications for global liquidity, currencies, and risk sentiment.
Yet markets have largely taken these issues in stride.3 That doesn’t mean investors are blind to risks or behaving with indifference. Instead, it suggests that the fundamental backdrop has continued to provide a strong enough foundation to help offset these concerns. When stepping back from the daily flow of headlines, the bigger picture still looks supportive for stocks, in my view.
Three factors supporting markets
First, there remains a meaningful amount of fiscal support in the global system.4 Governments across most major economies continued to spend, whether through industrial policy, infrastructure investment, or defense outlays. That spending often finds its way into corporate revenues and can support broader economic activity.
Second, corporate earnings have been consistently strong. Companies in the S&P 500 Index have now delivered double-digit earnings growth for six consecutive quarters.5 Importantly, the strength has been broad-based, with nine of 11 sectors exceeding expectations in the most recent reporting period.6 This isn’t a narrow story driven by just a handful of industries. Many analysts also continue to expect another quarter of double-digit growth ahead and have raised expectations for the full year.7
Third, the US economy has continued to show resilience. Last week’s employment report marked the second consecutive reading that can be characterized as solid.8 Job growth has remained healthy enough to support income and spending, in my view, but not so strong to reignite inflation concerns. For now, it appears to point to a labor market that’s stable and an economy that’s still expanding at a reasonable pace.
Taken together, these factors help explain why markets have been able to move higher even in the presence of ongoing risks. It’s not that investors are asking “What, me worry?” in a carefree or dismissive way. Instead, many appear to be weighing the balance of evidence and concluding that the positives still have the upper hand.
So, while there’s no shortage of reasons to be cautious, there’s also a rationale for why markets continue to advance. It appears to be a market defined by complacency. One that’s navigating uncertainty while still benefiting from solid corporate performance and a durable economic backdrop.
What to watch this week
| Date | Region | Event | Why it matters |
|---|---|---|---|
| May 11 | US | Existing home sales and housing survey | Shows housing demand and supply trends, which signal broader economic health |
| US | Consumer Price Index (CPI) | Key measure of inflation that shapes interest rate expectations and market direction | |
| May 12 | UK | Labor market data and wages | Provides insight into employment strength and wage pressures affecting inflation |
| May 13 | US | Producer Price Index | Tracks input cost pressures for businesses, which can feed into consumer inflation |
| Eurozone | Industrial production | Signals strength or weakness in manufacturing activity across the region | |
| China | Industrial production and retail sales | Shows momentum in domestic demand and factory activity in a major global economy | |
| May 14 | US | Retail sales | Indicates consumer spending strength, which drives overall economic growth |
| US | Import and export prices | Shows global price pressures and currency impacts on trade | |
| US | Business inventories | Provides insight into demand trends and future production adjustments | |
| Japan | Producer Price Index | Indicates pipeline inflation and cost pressures for businesses | |
| Germany | Trade balance | Reflects export demand and global trade conditions for a key export-driven economy | |
| May 15 | US | Industrial production and capacity use | Measures factory activity and slack in the economy |
| US | Empire State manufacturing survey | Gives an early signal on manufacturing conditions and sentiment | |
| US | University of Michigan consumer sentiment | Tracks consumer confidence, which influences spending behavior |
—
Originally Posted May 11, 2026
Three reasons why markets have advanced despite worries By Invesco US
Footnotes
- Source: Bloomberg, L.P. May 8, 2026, based on the 10-year UK government bond yield. “Liz Truss moment:” A reference to a rapid loss of market confidence triggered by a sudden or poorly received policy shift, leading to sharp moves in interest rates, currencies, and asset prices.
- Source: CNBC, “Japan may have fired its yen bazooka twice, but markets are testing Tokyo’s resolve,”May 7, 2026.
- Source: Bloomberg, L.P., May 7, 2026, based on the 2.20% US dollar return of the MSCI All Country World Index over the first four days of the week. The MSCI All Country World Index (ACWI) captures large- and mid-cap representation across 23 developed markets (DM) and 24 emerging markets (EM) countries. With 2,515 constituents, the index covers approximately 85% of the global investable equity opportunity set.
- Source: World Bank, April 30, 2026
- Source: Bloomberg, L.P., March 31, 2026, based on the earnings per share growth of the companies in the S&P 500 Index.
- Source: Bloomberg, L.P., March 31, 2026, based on the earnings per share growth of the companies in the S&P 500 Index.
- Source: MSN, “S&P 500 earnings surge to highest growth in four years,” May 5, 2026.
- Source: US Bureau of Labor Statistics, April 30, 2026, based on US employees on nonfarm payrolls.
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