The stock market is right back to where it started when the Fed first started raising interest rates

Happy Friday! Phil Rosen here. It's great to be in your inbox this morning.

It's been 15 months since Jerome Powell embarked on one of the most aggressive policy campaigns ever.

After much pain and a brutal bear market, the S&P 500 has erased all of the losses from the past year and then some.

1. It's true: the S&P 500 has erased all of its losses since the Fed's first rate hike in March 2022.

The index dipped initially after the Fed paused Wednesday, but it finished the session higher at 4,372.59.

On March 16, 2022 — the day of the Fed's first rate hike this cycle — the S&P 500 closed at 4,357.86.

Remember, last spring we were staring down historic inflation and the prospect of climbing borrowing costs. That led to a sell-off across asset classes, a bear market, and enough recession calls to last a decade.

But the key stock index has effectively shrugged off all that for two reasons:

1. Strong earnings.
2. AI hype.

Simply put, corporate earnings have been able to defy downbeat outlooks more than anyone expected, and the ballooning hype in the AI space has powered a broad stock rally.

Names like Nvidia and Meta have led the way with triple-digit returns in 2023, and smaller tech names have benefited too.

With inflation still cooling at a steady clip and the Fed's latest pause, investors are acting like there are better days ahead, even if Powell points to a couple of more hikes to come.

History says as much, too.

In years past, a pause in rate increases preceded double-digit returns in the market.

What's your stock market outlook for the rest of the year? Tweet me (@philrosenn) or email me ([email protected]) to let me know.

In other news:

2. US stock futures rise early Friday as the S&P 500 extended its winning run with a sixth straight day of gains. Check out the latest market moves.

3. Earnings on deck: Canaccord Genuity, Top Glove, and more, all reporting.

4. Morgan Stanley said these 30 stocks look promising for the current landscape. This batch of names with strong pricing powers are immune to falling inflation and the damage it will do to profit margins, according to the firm. See the list.

5. Low inventory, high mortgage rates, and steep prices are keeping the housing market expensive. But some pockets of the country have been even tighter than others, with some cities seeing homes listed at more than 40% above their historical value. These are the 10 cities where Americans are overpaying the most.

6. These five charts capture a rollercoaster 15 months for markets. The Fed's rate "pause" this week capped off a tumultuous stretch for bonds, stocks, and crypto. See the data here.

7. Investors are pouring money into Tesla, and it's because the stock is turning into an AI bet on top of its status as the top electric vehicle name. More here.

8. These "left for dead" value stocks look poised to outperform. Top fund manager Brian Frank — who beat 99% of his peers last year — expects the tech trade to unwind in an imminent recession. Here are his seven best bets.

9. The Kremlin secretly ordered legislation last week that allows Western assets to be seized at steep discounts. Moscow, per the Financial Times, is laying claim over the assets of "naughty" firms. The new rules will likely make it harder for Western companies to halt business operations in Russia.

10. Bitcoin briefly dipped below $25,000 on Thursday. Fed hawkishness has hurt the token, like other risk assets, while the SEC's big moves against Coinbase and Binance are creating uncertainty. Still, bitcoin this year is up more than 50%.

Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email [email protected].

Edited by Max Adams (@maxradams) in New York and Nathan Rennolds (@ncrennolds) in London.