Three reasons why markets have advanced despite worries

Markets have continued to rise because the underlying backdrop has remained stronger than the headlines suggest. Government spending, especially on infrastructure, industrial policy, and defense, is still flowing through to corporate revenues and economic activity.

Corporate earnings have also been a major support. S&P 500 companies have delivered several straight quarters of double-digit earnings growth, with gains broad enough to extend beyond just a few sectors.

The US economy has added another layer of resilience. Job growth remains healthy enough to support spending without clearly reigniting inflation fears.

For investors, the message is that risks are real but not yet overwhelming the market’s fundamentals. That leaves room for caution, but also for selective participation in areas tied to earnings strength and durable economic growth.