What if It’s Still Early? With Denise Chisholm

The current equity market rally reflects a durable earnings recovery rather than a speculative bubble, driven by a broad-based capital expenditure cycle. While skepticism persists regarding the sustainability of AI-related spending, corporate America is shifting from share buybacks to productive infrastructure investment, which historically supports long-term growth. Denise Chisholm, Director of Quantitative Market Strategy at Fidelity, notes that the 493 stocks outside the dominant technology leaders are entering a period of margin expansion after three years of contraction. Furthermore, inflation concerns and potential Federal Reserve rate hikes remain secondary to the primary driver of earnings growth. Even with significant new equity issuance expected from upcoming IPOs, the market remains supported by robust fundamental data, suggesting that current valuation compression is a rational response to persistent investor fear rather than a sign of systemic instability.