Stocks rose again Tuesday for the third positive day in a row, marking the first three-day streak since September.
On Sept. 12, the three major indexes notched a four-session win streak. That day also marked the best close of the month for the averages. Investors say the rally is coming on growing optimism that new data could signal the economic slowdown the Federal Reserve needs to see to either slow down its rate hikes.
The tech-heavy Nasdaq Composite had a particularly strong performance as Wall Street gears up for a slew of its biggest names to report earnings. The first of those names, Alphabet and Microsoft, came out after the bell Tuesday.
But investors vary over what to think of this rally.
Paul Zemsky, chief investment officer of multi-asset strategies and solutions at Voya Investment Management, said the new data and pullbacks in bond yields were like a rainbow after a storm and could signal that the markets have adequately priced in future rate hikes.
"We're seeing enough slowing in the economy that we don't have to worry about the Fed really raising rates beyond what's already priced," he said.
Nick Baron, senior investment specialist at Brainvest, said the current rally is likely a "head-fake," meaning the markets will probably go in the opposite direction soon.
Calling the streak just a "little bear market rally" on optimism of the Fed changing course, he said he's advising investors to stay put. He argues that it's better to miss the first few upticks coming out of a bear market than to see what happens if they didn't correctly calculate the bottom.
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