(Bloomberg) — A stellar quarter for stocks is ending with a sense of caution, with traders gearing up for key inflation data after the latest Fedspeak reinforced bets policymakers will be in no rush to cut interest rates.

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The relentless Wall Street rally that added $4 trillion to equity values this year lost some traction after Federal Reserve Governor Christopher Waller said he wants to see “at least a couple months of better inflation data” before cutting rates. Not even solid economic readings were able to move the needle ahead of the Fed’s preferred inflation gauge and Jerome Powell’s remarks Friday — when markets will be closed.

“When you title a speech ‘There’s Still No Rush’, you have a point to make,” said Peter Boockvar, author of the Boock Report. “Waller joins voting member Raphael Bostic in wanting to wait — and only likely expecting 1-2 cuts this year.”

The S&P 500 wavered around 5,250. Two-year yields rose three basis points to 4.6%. The bond market was set to close at 2 p.m. New York time. Swaps traders trimmed bets on Fed easing, with contracts showing an implied probability of about 60% for a June cut. The dollar was on track for a quarterly gain.

“Right or wrong, expectations for a June rate cut probably won’t shift unless inflation continues to rise and the labor market appears to be a major contributor to the increase,” said Chris Larkin at E*Trade from Morgan Stanley.

“We maintain the view that by the time of the June meeting, conditions should be right for the Fed to trim rates,” said Solita Marcelli at UBS Global Wealth Management.

In economic data, the government’s two main measures of activity — gross domestic product and consumer spending — posted strong advances at the end of last year. Consumer sentiment rose markedly toward the end of March, supported by strong stock-market gains and expectations that inflation will continue to ease.

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To Chris Zaccarelli at Independent Advisor Alliance, a solid economy — driven by a resilient consumer — sets the table for another strong earnings season, which will kick off next month.

“For those that are still holding onto the idea that the much-forecasted 2023 recession is right around the corner, they’ve missed an excellent 15 (if not 17) months in the stock market,” Zaccarelli noted.

The S&P 500 will end the year at 5,300 as the consensus real US GDP forecast has climbed in a positive sign for stocks, according to RBC Capital Markets’ Lori Calvasina, who raised her target from 5,150.

“We think the market’s view of where economic fundamentals are heading, rather than any one economist’s or strategist’s view, is what ultimately drives stock market pricing.”

The S&P 500 is blowing past milestones this year, even as the rally leads some to worry about the market running too hot. But now a technical indicator that has an “undefeated” record suggests the momentum isn’t going to fade any time soon.

The relative strength index of the benchmark gauge — which measures price momentum — has closed above a value of 50 for 100 straight trading sessions as of Wednesday’s close, data compiled by SentimenTrader showed. After a similar show of strength in its price momentum, the S&P 500 was higher every time over the ensuing two, three, six, and twelve months periods, the analysis found.

The valuation of the equal-weighted S&P 500 has increased to a price-to-earnings ratio of 17 — but the index has shown in the past that it can continue to rise even when trading above fair value, according to Goldman Sachs Group Inc. strategists led by Ryan Hammond.

“For investors concerned about overvaluation or risks to the economic outlook, our options strategists note that downside protection appears attractively priced,” the strategists wrote.

The relentless bull run sent the S&P 500 up 10% this year — putting the index on pace for two straight quarters of double-digit percentage gains.

Since World War II, such a feat would be followed by mild weakness in the following month — with the gauge climbing by an average of 12.27% one year later, according to data compiled by Bespoke Investment Group.

“While in the near term it wouldn’t surprise us if equity markets pulled back, history would suggest that it’s too soon to fade equities,” said Ryan Grabinski at Strategas Securities.

Grabinski looked back at previous five-month periods where the S&P 500 was also up about 27%. Of the 130 observations, there was just one that resulted in a negative return 12 months later.

Corporate Highlights:

• Home Depot Inc. said it would buy building-products distributor SRS Distribution Inc. for about $18.25 billion in a bid to bolster the company’s professional services business.

• Walgreens Boots Alliance Inc. narrowed its fiscal 2024 guidance citing a challenging retail environment, including reduced consumer spending.

• B. Riley Financial Inc., the boutique investment bank facing questions about its dealings with a former business partner, gained extra time to supply missing financial data to its lenders.

• Palantir Technologies Inc. was cut to sell at Monness, Crespi, Hardt & Co., which cited “egregiously rich” valuation.

• Estee Lauder Cos. was raised to buy at Bank of America Corp., which said the company’s earnings have now bottomed.

• Country Garden Holdings Co., once China’s top property developer, warned it will miss its deadline for reporting annual results as more information is needed for appropriate accounting.

Key events this week:

• Good Friday. Exchanges closed in US and many other countries in observance of holiday. US federal government is open.

• US personal income and spending, PCE deflator, Friday

• San Francisco Fed President Mary Daly speaks, Friday

• Fed Chair Jerome Powell speaks, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 11:08 a.m. New York time

• The Nasdaq 100 was little changed

• The Dow Jones Industrial Average was little changed

• The Stoxx Europe 600 rose 0.3%

• The MSCI World index was little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro fell 0.3% to $1.0798

• The British pound was little changed at $1.2629

• The Japanese yen was little changed at 151.28 per dollar

Cryptocurrencies

• Bitcoin rose 3.5% to $71,272.35

• Ether rose 2.3% to $3,592.09

Bonds

• The yield on 10-year Treasuries was little changed at 4.19%

• Germany’s 10-year yield was little changed at 2.29%

• Britain’s 10-year yield declined one basis point to 3.92%

Commodities

• West Texas Intermediate crude rose 1.5% to $82.61 a barrel

• Spot gold rose 0.9% to $2,215.10 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Esha Dey and Jessica Menton.

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