The US — and global — stock market rally seems to be losing steam even as the S&P 500 index hits a fresh all-time record high. It would appear that the upbeat sentiment on the reopening of economies is almost all played out.

The economic recovery is unfolding in fits and starts with the resurgence in Covid-19 cases around the world. Case in point: The US unemployment rate has fallen to 10.2% from the peak of 14.7% in April but job gains have noticeably slowed in recent weeks. The recovery in consumer spending is also likely to slow as direct aid under emergency stimulus packages tapers off.

What then will drive the next leg of the stock market rally?

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