🌎 Summer stock rally

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Here’s what you need to know

Economy shrinks in Q1. The final quarterly GDP estimate shows that the U.S. economy contracted (worse than previously thought) as tariffs weigh heavily on growth.

High standards

Wall Street’s wall of worry just got a fresh coat of optimism.

After months of macro drama, the S&P 500 briefly topped its February intraday high on Thursday before slipping just below a record close. The latest lift came from a rare alignment of market-friendly forces: a cooling of Middle East tensions, falling oil prices, AI-fueled tech earnings, and renewed hope that the Fed might actually — finally — cut rates later this year.

Oil prices are down hard — 6% over two sessions in their steepest drop since 2022 — as a fragile Israel-Iran ceasefire let investors breathe for the first time in weeks. Add a three-year-low dollar and drifting bond yields and suddenly the market’s summer risk profile looks a lot less sweaty.

Enter the Federal Reserve. Chair Jerome Powell is still clinging to his data-dependent script, but traders are warming to the idea of a rate cut this year. July remains a long shot (about 20% odds), but traders are thinking that a September cut is looking more likely than not. And with inflation easing and labor markets just soft enough to justify a pivot, the “soft landing” narrative has made yet another comeback tour.

Still, don’t confuse altitude with breadth. Big Tech — led by Nvidia’s latest record high — is still doing most of the heavy lifting, masking lag in rate-sensitive sectors and small-caps. The Russell 2000 is still in the red for the year. About one-third of S&P stocks remain below their 50-day averages. For all the hype, this is a familiar rally: high concentration, higher hopes.

Sure, the economic backdrop remains uneven. Job openings are down, wage growth is cooling, and delinquencies are on the rise. UBS warns markets are priced for perfection, and BCA Research thinks a 25% correction isn’t out of the question. But for now, the bulls have the upper hand — and if momentum holds, a record close could be just a few steady steps away. Quartz’s Shannon Carroll has more on why Wall Street’s rally is riding on tech and timing.

Needle little help?

GLP-1 drugs such as Ozempic, Wegovy, and Zepbound — once billed as vanity injections for the semi-rich and semi-famous — are quietly being rebranded as the future of modern medicine. According to FAIR Health, more than 30 million Americans now take them. That’s over 2% of the population, in just four years, and pharmaceutical insiders are already calling GLP-1s the “new statins.”

But unlike statins, which became the most prescribed drugs in the U.S. by being cheap, boring, and wildly effective, GLP-1s are expensive, volatile, and hyped like a Netflix true crime doc. They’re currently being studied for everything from sleep apnea to Alzheimer’s, and the American College of Cardiology just updated its guidelines to recommend them as the first-line treatment for obesity — ahead of that quaint combo known as “diet and exercise.” Sorry, kale.

Morgan Stanley now pegs the global GLP-1 market at $150 billion by 2035, up from $15 billion last year. But there are caveats — including the fact that up to 70% of users suffer side effects (such as nausea, vomiting, and gastrointestinal distress) and stop taking GLP-1 drugs within a year. Cost is the other issue for GLP-1s. These injectable drugs can run over $1,000 a month and are still a fight to get covered by insurance. But oral versions may change that: Eli Lilly’s once-daily pill, orforglipron, just cleared a major hurdle and is expected to seek FDA approval by the end of the year.

The truth? GLP-1s might not be the next statins, but they’re already too effective — and too lucrative — to ignore. The bar isn’t whether they’ll save money. It’s whether they’ll save enough lives to justify the spend. Quartz’s Catherine Arnst has more on whether this blockbuster drug is built to last.