64.3% of Investors Remain Bullish Even as Market Sinks and Economic Alarms Ring

Clouds of uncertainty are gathering over the US economy, but investors seem to be sunlit with optimism. Despite the S&P 500 and Nasdaq capping their worst quarterly performance since 2022, with the indexes down 4.3% and 10.2% year-to-date, respectively, our latest Bear and Bull survey reveals rising bullish sentiment among readers — 64.3% are bullish. That comes in spite of souring economic indicators, such as declining retail sales, accelerating jobless claims, and the weakest readings of consumer confidence seen since 2022.

• The Atlanta Fed’s GDPNow model predicts a 2.8% contraction for Q1 2025, with the five-year inflation outlook having exceeded 4% for the first time since 1993.
• This gloomy outlook coincides with Goldman Sachs boosting its recession probability forecast to 35% while predicting the Federal Reserve will now deliver three interest rate cuts this year.

The bigger economic picture: Big players like Virgin Atlantic, CostcoCOST

, and LululemonLULU

have been sounding the alarm, indicating slower spending and changing consumer behaviors. Meanwhile, political winds are changing, testing the resilience of traditional safe-haven investments like Treasuries. Once reliable during downturns, the bonds are losing their appeal as both long-term investments and short-term protective assets. Similarly, the US dollar’s historical “smile” pattern — strengthening during both economic booms and busts — appears to be fading, while gold is rising as a favored alternative among investors. In response to these changes, investors need to fine-tune their strategies (or look away) — balancing tariff troubles, labor twists, and sticky inflation to keep their edge in a market that’s anything but predictable.