Despite the looming crisis, a Second-Half Stock Market Rally is still in place

The stock-market believers see past the worst stretch for US equities in months and are resolute to betting on a rally in second half of the year, once the Federal Reserve stops raising interest rates.

As speculation grew that the Fed would raise borrowing costs more often, possibly pausing in July, the S&P 500 Index is now at its lowest level since Dec. 9. This is a much steeper path to policy tightening that investors had expected just a few short weeks ago.