Stock Rally Nobody Is Comfortable With Makes It Hard to Chase

Equity investors pushed back into the market by a relentless rally are about to find out that the real challenge is just beginning.

A sharp rebound in risk assets — fueled by progress in trade talks, economic resilience and receding volatility — is turning skepticism into a trade that nobody’s really comfortable with, following a month in which the consensus was to brace for the worst. The three-month pause in US-China trade tensions is reassuring investors, yet lurking in the background is the risk that stocks get so extended that they’re vulnerable to any fresh surprises.

“Markets are in ...