A flat market index doesn't mean inactivity. It often signals a mid-cycle transition where leadership shifts from capital-intensive early-cycle winners to higher-quality companies with strong cash flow, such as software and financial services.
While media outlets react to new inflation reports, the equity market has often already adjusted. Valuations fall and leadership rotates well in advance, as the bond market anticipates policy changes and effectively begins the Fed's tightening work.
The common narrative blames rising yields on government debt. However, a more significant driver is often strong nominal GDP growth. This environment is actually positive for equities, as it boosts revenues and earnings, making stocks an effective inflation hedge.