SP500 is only 1.8% down since liberation day after weeks of recovery. The more the economy stabilizes, the more China will end up caving.

The S&P 500 slipping just 1.8% after a strong run isn’t much of a red flag—it’s more like a breather. Markets don’t move in straight lines, and after a few solid weeks of gains, some pullback is normal. What it really shows is that investors still feel pretty good about where things are headed: inflation looks like it’s cooling and earnings haven’t been a disaster. Sure, there are risks out there—China, geopolitics, oil—but the fact that the market hasn’t sold off hard suggests people think the worst of it is either under control or already baked into prices. In short, confidence hasn’t cracked.