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A server carries drinks to a table at P.J. Whelihan's restaurant and pub in Spring Township, Pennsylvania.
A server carries drinks to a table at P.J. Whelihan's restaurant and pub in Spring Township, Pennsylvania.

Ben Hasty/MediaNews Group/Reading Eagle via Getty Images

  • Stocks are off to a strong start in 2023 after last year's selloff, with cooling inflation a pillar of support. 
  • But there's stickiness in services inflation, and that poses downside risks for equities, analysts said. 
  • Wage growth has eased but an even slower pace would suit the Fed's inflation-fighting goal. 

A downward trend in inflation has made for a bullish backdrop for stocks in 2023, but market watchers caution that persistent price strength in a key portion of the world's largest economy may stop the latest rally in its tracks. 

Tags
Markets, MI Exclusive, Stocks, S&P 500, Inflation, economy, Recession, Bonds, Yields, Wages, Federal Reserve, FOMC, Interest Rates
Source
Inflation has cooled, but investors risk being caught off guard by a 'head fake…