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The US economy is going backwards. This rally looks bonkers

The latest GDP figures raise the odds of a recession, but markets are surging like Donald Trump’s tariff war is over.

One of the market sayings that always sticks in my mind is that investor sentiment is like holding a beach ball under water – no matter how far down it is, it always wants to pop back up.

We got another reminder of this on Wednesday night, when Wall Street’s S&P 500 rose for the seventh straight session despite new gross domestic product data showing the American economy shrunk in the March quarter, and at a faster rate than expected.

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James Thomson is senior Chanticleer columnist based in Melbourne. He was the Companies editor and editor of BRW Magazine. Connect with James on Twitter. Email James at j.thomson@afr.com

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    Original URL: https://www.afr.com/chanticleer/the-us-economy-is-going-backwards-this-rally-looks-bonkers-20250501-p5lvkk