The stock market is abuzz with the news of the Federal Reserve’s first interest rate cut in more than four years. The move is intended to boost the U.S. economy. Investors cheered it, and the S&P 500 hit a new record high. 📈

However, there are concerns that stocks are overpriced. The S&P 500 is trading at more than 21 times forward earnings, well above the historical average of 15.7. This means investors are paying more for each dollar of future earnings.

On the other hand, commodities like gold are also up. Gold hit a new record, and that trend is expected to continue. The rate cut has weakened the dollar, making gold more attractive. 🏅

Despite high stock valuations, some investors remain optimistic. Stocks tend to perform well after interest rate cuts, especially if the economy avoids a recession. The S&P 500 has historically gained about 18% in the year following a rate cut.