U.S. stocks have delivered modest early gains so far this year but have navigated a series of headline risks tied to the AI investment thesis, renewed inflation risks, tariff uncertainty, and a looming face-off over the debt ceiling.

The S&P 500 is up about 3.4% for the year, with the Nasdaq trailing by about a percentage point thanks in part to the lagging performance of megacap tech stocks linked in part to concerns over their crippling capital spending plans.

However, while U.S. stocks have fallen behind their European peers over the first six weeks of the year, their performance has been solid, given the myriad risks investors have had to endure, including the ongoing question of President Donald Trump’s tariff policies and their impact on the broader economy.

What’s kept stock buoyant in the face of that concern and a sell-off in megacap and AI stocks following the emergence of China-based DeepSeek’s cut-priced Chatbot?  Much better-than-expected fourth-quarter earnings bode well for corporate profit growth over the coming year.

With around 80% of the S&P 500 reporting December quarter earnings, collective profits are set to rise by nearly 15% from the same period in 2023 to just under $545 billion.