The Dow and Nasdaq hit new records yet again on Tuesday, as hopes over a pause for the trade war boosted investor sentiment.

The fresh stock highs are breathing new life into the “bull case” for continued US economic growth, Michael Darda, chief economist and market strategist at MKM Partners, observed in a note to clients.

The argument, as Darda sees it: “With a tight labor market, recovered household savings rate and high confidence levels, consumers will continue to support growth. Thus, if manufacturing [and] business investment simply bottom out, growth will continue, if not accelerate.”

He’s not convinced of a so-called “soft landing,” though — pointing to a drop-off in business loan demand in a recent report from the Federal Reserve that looks “similar to what was seen just prior to the last two downturns.”

The key indicator he’s watching now is first-time jobless claims. “If claims can hold at low levels through at least next summer, there will be a more persuasive case that the US indeed dodged the recession bullet,” Darda said.

The argument: This metric is somewhere between a long-term warning sign — like a sustained yield curve inversion, when yields on short-term Treasuries jump above the yields on longer-dated notes — and a real-time warning sign such as the unemployment rate, per Darda.

Investor insight: Should US stocks keep pushing higher, expect to hear a lot more talk about how the recession fears that set in over the summer were overblown. But plenty of investors — and companies — remain on high alert.