By John Stewart, chief investment officer at Farmers Trust Co.

Week in Review: More Good News for Stocks

This past week has provided plenty to keep investors on their toes.

Over the weekend, President Trump announced he would be pausing tariffs on Europe by 90 days, which was good for a pop off more than 2% in all the major market indexes on Monday.

Then on Wednesday evening, markets got a double-dose of positive news with better than expected quarterly results from chipmaker NVIDIA along with an announcement that the FTC ruled Trump’s reciprocal tariffs in conflict with existing laws.

Throw in some better than expected consumer confidence numbers and an upwardly revised first quarter GDP report, and stocks have continued their upward trajectory they’ve been on since mid-April.

Now that the market is back within striking distance of its all-time highs, investors will continue to look for clues that the economy is on solid footing – and for the time being, it looks like it probably is.

There’s some talk out there about how AI is going to replace humans when it comes to investing.

I beg to differ.  First of all, the stock market is the most advanced AI system ever created.  The market itself incorporates all available information and human intelligence – INCLUDING anything AI might add to the equation, which it likely couldn’t because it can only pull from information that is currently available.

Don’t take my word for it though – we now have some studies that are available that bear out my thinking.

A study by Scientific American showed that only 10 of 43 funds partially managed by AI outperformed the S&P 500 and the average fund underperformed by more than 5 percentage points.

Out of 11 funds fully managed by AI – every single one underperformed the market, six actually lost money, and the average fund underperformed the market by nearly 10 percentage points.

Out of the total of 54 funds studied, 31 have since been closed down.

Monkeys throwing darts at a board could do a lot better.

Looking Ahead: More Economic Data to Watch

We’re going to get a lot of economic data next week.

ISM reports from both manufacturing and services will give us a taste of what businesses are saying about the economy.

Construction spending and factory orders will give us some hard data on what’s happening in the economy.

And the closely watched monthly jobs report due out on Friday will give investors more clues to the health of the labor market.

The resilience of the labor market and consumer spending have been pointed to as the key factors in supporting this economy, and by extension the stock market.

Any signs of weakness in that report could be met with selling pressure by investors.