Investors Temper 2024 Rate Cut Hopes, But Still See Stocks Rising on Strong Earnings

• Investors are lowering expectations for Fed rate cuts in 2024, but strategists still see stocks rising due to strong earnings growth.

• The timing and amount of eventual Fed rate cuts matters less than the reason why they cut rates. Cuts due to economic weakness would be more concerning.

• Limited signs so far that high rates are significantly slowing corporate earnings or economic growth.

• An economic "no landing" scenario with accelerating growth but slower disinflation could benefit large caps over small caps.

• Fed Chair Jerome Powell's comments remain key for interest rate expectations and market moves.