A fresh American bull market is under way. Can it last?

How sweet it is to forget. Just months ago financial markets were being pummelled by war, inflation and the prospect of rapidly rising interest rates. January to June this year were the worst first half for American shares in more than five decades. The s&p 500, America’s leading index of stocks, slumped by 21%; the tech-heavy nasdaq shed 32%. Yet since the middle of June the market has staged a remarkable comeback. The nasdaq has climbed by more than 20% from its low, officially entering a bull market; the s&p 500, up by 17%, is verging on bull territory of its own. Apple is now just 7% shy of being valued at $3trn, as it was, briefly, on January 3rd. Can the turnaround continue?

The good news is that the rally is underpinned by, well, good news. As companies’ earnings releases over recent weeks have shown, American consumers still went shopping in the second quarter. On August 16th Walmart reported that households’ spending grew strongly, helping its revenue climb by 8.4% on the year. Gauges of consumer sentiment are picking up. America added a whopping 530,000 jobs in July and, more hearteningly still, consumer prices did not rise compared with a month earlier. The market rout of the first half of 2022 has also yet to expose lurking dangers in the financial system. Aside from blow-ups in dodgier corners of the crypto-sphere, American finance has so far proved resilient.