US Equities (^GSPC, ^DJI, ^IXIC) are trading in the green on Tuesday after a slight dip on Monday, the market rally appearing to resume. State Street Global Advisors Chief Investment Strategist Michael Arone joins Yahoo Finance to discuss why feels the soft landing narrative remains intact as the first quarter comes to a close.

Arone elaborates on the bullish sentiment in the market: "It is hard to bet against stocks at this moment. As you mentioned, the economy continues to expand, the labor market is in good shape. Inflation is moderating. Earnings are growing and consumers are spending. That is a formula for risk assets to continue to do well. The only thing I would highlight is that with valuations where they are and markets at all-time highs, I do think that the risks are likely skewed to the downside, it's just hard to envision what is that risk today."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

AKIKO FUJITA: Well, stocks moving higher today as markets look to continue the record-setting run to start the year. And with inflation cooling, the labor market solidifying and the economy expanding. Our first guest today says that as Q1 comes to a close, the soft landing narrative remains intact.

Let's welcome in State Street Global Advisors Chief Investment Strategist Michael Arone. Michael, good to talk to you. We've seen a number of firms really up their S&P 500 targets, given the run-up that we have seen so far. Where do you stand on that right now?

MICHAEL ARONE: So it is hard to bet against stocks at this moment. As you mentioned, the economy continues to expand. The labor market is in good shape. Inflation is moderating. Earnings are growing. And consumers are spending. That is a formula for risk assets to continue to do well.

The only thing I would highlight, Akiko, is that with valuations where they are and markets at all time highs, I do think that the risks are likely skewed to the downside. It's just hard to envision what is that risk today. Perhaps it's the Fed remaining too restrictive for too long and slowing the economy more than expected.

JOSH LIPTON: What about, Michael, sentiment? That's one another kind of variable some strategists have flagged to us on the show there they're looking at those surveys, Michael, and maybe it's too many people on one side of the boat. How much weight do you give sentiment?

MICHAEL ARONE: Josh, it's interesting, just before I got on air, I checked out the AAII survey. I had to do that really slowly. But from my perspective, what was interesting is the bullish sentiments around 43%. On average, it's around 37%. And both neutral and bearish, they were kind of in line with historical kind of averages on those figures.