Despite expectations that higher interest rates should logically push stock prices lower, the S&P 500 remains strong. However, the market is perceived as highly valued, and returns might not keep pace with inflation, raising concerns for long-term investors.

The S&P 500 is seeing upward pressure due to potential economic data improvements from pull-forward demand ahead of threatened tariffs on the EU. However, as stocks reach near all-time highs, concerns arise that higher stock values may provoke more aggressive tariff actions from Trump, suggesting a cautious outlook and the possibility of a downturn.