To the casual observer, the rally in the stock market may seem baffling.

The effective tariff rate on U.S. imports is the highest it has been since the 1930s, upending supply chains, stoking inflation concerns and underpinning an intensifying war of words between President Trump and Jerome H. Powell, chair of the Federal Reserve.

But the S&P 500 has continued to hit new highs. The index has recovered all the ground it lost in the global market sell-off in April, after Mr. Trump announced sweeping tariffs. It is now more than 5 percent above its last peak, in February, and almost 10 percent higher for the year.

For the time being, the economic reality of tariffs has yet to catch up with the market’s earlier worries.

Corporate profits remain strong, and the economy, despite worries about what’s to come, is still solid. There are pockets of weakness, but the biggest companies that drive the S&P 500’s performance have been largely insulated against further impact from tariffs, propelled instead by the growth of artificial intelligence.

“There is a case to be made there that we are through the worst of it,” said Stuart Kaiser, an equity strategist at Citigroup.

With most companies in the S&P 500 having already reported earnings for the three months through June, the average growth rate of the companies in the index nudged into double digits for the third quarter in a row, according to data from FactSet.

Big tech companies again led the way, helping to justify their high stock prices. A further contraction in the energy sector, alongside the continued malaise for manufacturers, paled in comparison with the growth of the tech juggernauts.

And while retailers and other companies that deal directly with consumers have complained about tariffs, the broad message among the big businesses that make up the S&P 500 is that they are manageable.

“This earnings season has allayed a lot of fears,” said Nelson Yu, head of equities at Alliance Bernstein.

At the end of the first quarter, just 17 percent of companies raised their expectations for how they would perform going forward, according to Citi. Many executives simply refrained from offering financial projections, citing uncertainty surrounding the Trump administration’s tariff policies.

But this quarter, more than 40 percent of companies in the index raised their earnings estimates, anticipating a more favorable environment than previously expected.

“Companies are telling you they have more clarity, because otherwise they wouldn’t provide that guidance,” Mr. Kaiser said.

Companies, much like investors, loathe uncertainty because it prevents planning and making major decisions. At least with the tariffs roughly in place, there is a sense among executives that the picture is becoming clearer.

This month, Citi raised its forecast for where the S&P 500 will finish the year, joining Bank of America, Goldman Sachs, Deutsche Bank and others that raised their targets recently.

Those forecasts, however, cluster around where the index stands now — mostly between 6,300 and 6,600, with Thursday closing at 6,469 — pointing to an expectation that the rally will slow the rest of the year and underscoring lingering concerns.

The recovery from the stock sell-off in April is less pronounced in other indexes.

The Russell 2000, which is made up of smaller companies less able to absorb the effects of higher tariffs, is just one index that hasn’t shown the same roaring recovery as the S&P 500.

The Russell turned positive for the year after this week’s inflation report showed only a modest impact so far from tariffs, cementing expectations that the Fed will soon cut interest rates as it starts to slowly take the brakes off the economy — albeit more slowly than the president would like.

Falling interest rates are generally seen as positive for the stock market, but if inflation speeds up significantly, the central bank will be less inclined to keep cutting rates, tempering the forecast for many of the companies that make up the Russell 2000 (and even some in the S&P 500).

That wariness has kept many larger fund managers from diving back into the stock market as enthusiastically as retail investors have, according to research from Deutsche Bank. If those hesitant investors return to the market, that could add a tailwind in the second half of the year. But the lack of activity also underlines that not everyone is convinced that the current rally is sustainable.

“The broader group outside of retail is more cautious, more neutral,” said Parag Thatte, an equity strategist at Deutsche Bank.

Even neutral is a much rosier sentiment than just a few months ago.

After the S&P 500 rose more than 20 percent for two consecutive years, worries that this year was going to be something of a reckoning for the market have faded.

“We don’t see any big cracks developing or any reason to think that the trends of the last few years are now broken,” Mr. Thatte said.