Stocks are rallying again. Are they out of the woods?

Wall Street appears to be rebounding after a recent global sell-off. The sell-off was triggered by the Bank of Japan raising interest rates, leading to a unraveling of the yen carry trade. Japanese stocks experienced their worst day in decades, and concerns of a recession arose in the US after a dismal July jobs report. However, a series of positive economic data this week has helped the market recover some of its losses. The Dow is above 40,000, and all three major indexes are set to have their best week of the year. The market’s fear gauge, the Cboe Volatility Index, has fallen significantly. Investors remain cautious as they await the Federal Reserve’s next meeting in September. There are expectations for an interest rate cut, but some central bank officials are taking a wait-and-see approach. Data has shown a cooling in inflation, and retail sales have risen. Traders are betting on a September rate cut, which has boosted the Russell 2000 index. Fed Chair Jerome Powell is scheduled to give a speech at an upcoming summit, where he may hint at the Fed’s next policy move. Crude prices have fallen after OPEC lowered its global oil demand growth forecast. In corporate news, Starbucks’ CEO is stepping down, and Walmart’s sales and operating income have increased, while Home Depot has lowered its sales expectations.