Theory 1: The market is up because the virus is under control

Likelihood: Not likely

Despite the trajectory of the market, investors are probably not boosting stocks because they think the virus is under control. In fact, Detrick suggests, many are still “scared to death.”

As cases keep spiking, though, “it’s sort of a big, collective, everybody’s got their fingers crossed,” Charles Schwab’s chief investment strategist Liz Ann Sonders suggests. Indeed, the market hasn’t been all smooth sailing lately: There have been two pullbacks in recent weeks that Sonders says were “at least partly driven by pretty negative news virus-related.”

But that doesn’t mean investors are purely focused on the virus situation right now. In fact, according to Edward Jones’s Nela Richardson, “I think investors are more thinking the best is yet to come. I think the market is just ahead of the first wave, gets ahead of even a second wave, and is already looking at 2021,” she tells Fortune.

Theory 2: The market is up because investors want a Biden victory in November

Likelihood: Not likely

The election was always going to roil the markets, and not just on election night.

Some Wall Street firms are now suggesting a Democratic (Biden) victory could even bode well for the stock market: “The consensus view is that a Democrat victory in November will be a negative for equities. However, we see this outcome as neutral to slight positive,” strategists at JPMorgan wrote Monday.

Edward Jones’s Richardson suggests a “more moderate candidacy is now being priced into the market so that a potential Democratic upset of an incumbent President wouldn’t be seen as extreme given the more moderate views” of a would-be President Joe Biden.

Yet strategists like Detrick “don’t think the stock market is up as much as it is because it’s a Biden victory, right now at least,” he says.

Theory 3: The market is up because earnings are on the mend

Likelihood: Somewhat likely

It’s no secret investors have largely been writing off 2020 for earnings, given that dozens of companies have suspended guidance and the estimates are grisly at best. In fact, Fortune reported in early June that investors have already discounted 2020 and are looking to 2021 earnings to justify how stocks are trading now. But Sonders is less convinced that “even on 2021 earnings to the extent you believe them, I don’t think anyone can have conviction in earnings in this environment,” she says.

What investors do appear to have is conviction that earnings for the second quarter likely won’t be as bad as expected.

Analysts at FactSet are estimating earnings in the second quarter will plummet –43.8%. But a huge number like that likely sets markets up for a surprise to the upside, LPL’s Detrick suggests. “I think it’s safe to say with the market bouncing back like this, it is expecting solid earnings or better-than-expected earnings,” he says.

Indeed, Richardson thinks “the market has already discounted a pretty big falloff in [second-quarter earnings], with slower slumps in Q3 and Q4,” and that “any improvement, even if it’s bad…[is] going to be regarded as good.”

Theory 4: The market is up because economic data is better than expected

Likelihood: Quite likely

Detrick is most convinced by the theory that the reopening, albeit not without its bumps, is going better than expected.

“The stock market is telling us that the economy really could be in much firmer shape the second half of this year because stocks tend to lead the economy, and we do think the theme of the reopening is probably the biggest chunk as to why stocks have bounced back as quickly as they have,” he says.

Unemployment dropped to 11.1% in June (down from 13.3% in May and 14.7% in April). Consumer spending for May, meanwhile, surged from two months of massive drops, up 8.2%.

And manufacturing, tracked by the Purchasing Managers’ Index (PMI) by the Institute for Supply Management, came in at 52.6 for June, up from 43.1 in May (any reading above 50 indicates expansion). For Detrick, the rebound in manufacturing is “the canary in the coal mine.”

It’s “all these economic surprises we’ve had” that have helped boost markets in recent weeks, argues Edward Jones’s Richardson. “The market is not focused on levels, they’re focused on rates [of change], and right now those rates point to a positive and quicker-than-normal recovery,” she says.

But the ever-improving numbers also pose a threat. Sonders suggests there’s been “too much extrapolating of the initial months’ data points too far into the future,” and that what’s important “in this environment is also the level of the data.”

Theory 5: The market is up because of the Fed

Likelihood: Extremely likely

Why is the market up? If you ask Charles Schwab’s Sonders, the answer is simple: “If you attempted to rank order what is probably most relevant to why the stock market has done what it’s done, I think it’s what the Fed has done and maybe add in Congress—stimulus, broadly.”

Over the past several months, the Fed has done it all: from standing up Main Street Lending facilities and corporate bond-buying to cutting interest rates to basically zero; while the government poured over $2 trillion into the CARES Act stimulus package.

The “don’t fight the Fed” mentality is one that has bolstered markets even as the economy rapidly deteriorated. Sonders notes that investors “maybe rightly” think the Fed is “going to be there as necessary,” but she’s anxious investors are relying too much on the Jay Powell–led liquidity injector.

The Fed has the financial system’s back, but “their mandate is not to prevent a down move in the stock market absent financial system stability,” Sonders points out. In that sense, she wonders, “how much of this move in the market tied to the Fed is based on the actual stimulus that they’ve kicked in for the right reasons, or a view that no matter what happens, there’s no downside in the stock market because the Fed will step in?”