The stock market rally that followed the U.S.-China agreement to temporarily reduce tariffs appears to have run out of steam , and investors may now find themselves uneasy with where prices sit. Adam Parker, founder of Trivariate Research, said in a note to clients Sunday that the “upside-downside ratio for the S & P 500 is not particularly attractive,” with the outlook for earnings looking particularly shaky. “The 20-year median Q3 year-over-year earnings growth is 4.7%. The growth in 2024 was 7.2% (higher than the long-term average) and yet estimates for 2025Q3 call for 7%. This is an above normal expectation for growth, against a more challenging than average comparison, six months lagged from the first major tariff implementation in nearly a century,” Parker said. “Does this holistically make sense? We don’t think so,” he added. .SPX YTD mountain The S & P 500 has rebounded sharply from its April lows. The S & P 500 currently has a forward price-to-earnings ratio of about 21.6, according to FactSet, which is roughly where the market was trading in late 2024 before President Donald Trump’s tariff rollout. “Investors have quickly gone from a glass-half-empty view on stocks to a glass-half-full view, which has significantly closed opportunity gaps that formed in early April,” Anthony Saglimbene, Ameriprise chief market strategist, said in a note to clients Monday. The U.S. economy has surprised to the upside quite often since the Covid-19 pandemic, and continued growth could help put a floor under the market. Michael Grant, co-chief investment officer at Calamos Investments, told CNBC that he thinks many economists are too pessimistic about the economy and that a recession is unlikely this year. “What the market is interpreting is a broadening of stimulus across the economy, of which this whole tariff plan is just a part,” Grant said. — CNBC’s Michael Bloom contributed reporting.