S&P 500 closes at record high despite Fed's cautious tone

The S&P 500 finished Friday, April 24, at a record 7,165.08, extending a rally that kept pushing higher even as Federal Reserve officials warned against rushing rate cuts. (fred.stlouisfed.org) (federalreserve.gov) That close came nine days after the index set its prior record on April 15 at 7,022.93, when markets were also climbing on hopes the U.S.-Iran ceasefire would hold. (abcnews.com) (fred.stlouisfed.org) By Sunday, Bloomberg reported the S&P 500 was up almost 10% since the end of March, putting April on pace for its best monthly advance since late 2020. (bloomberg.com) The move has come alongside much weaker signals from households. The University of Michigan said its consumer sentiment index fell to 49.8 in April from 53.3 in March, the lowest reading in the survey’s history. (sca.isr.umich.edu) (reuters.com) Inflation expectations moved the other way. Joanne Hsu, director of the Michigan survey, said consumers across party, income, age, and education groups all turned more pessimistic in April. (sca.isr.umich.edu) Federal Reserve Governor Christopher Waller said on April 17 that he remained “cautious about rate cuts now” and would be more inclined to support cuts later in 2026 if the outlook became steadier. (federalreserve.gov) A Reuters poll published April 22 found economists now expect the Fed to wait at least six months before cutting rates, after war-driven energy shocks pushed inflation concerns back up. (reuters.com) Markets have not traded as if that caution will stop the rally. Bloomberg said falling Treasury yields and expectations that the central bank could resume cutting later this year helped keep risk assets near records. (bloomberg.com) The gap is the story: stocks are pricing a path through inflation, oil shocks, and Fed restraint, while consumers are still reporting the weakest confidence on record. (fred.stlouisfed.org) (sca.isr.umich.edu)