NEW YORK (TheStreet) -- The news was good on Tuesday -- strong housing and durable-goods numbers -- but the markets tumbled anyway, with the Dow Jones Industrial Average sliding 186 points

So what happened? Blame the paradox on interest rates: The positive data fueled concern that the U.S. economy is strong enough to warrant an interest-rate increase from the Federal Reserve. Rates were slashed to around zero during the financial crisis and have remained there for more than six years, helping push stocks to record highs.

"We are heading back into a period were good news is actually bad news," said David Lebovitz, global markets strategist at J.P. Morgan Funds (JPM). "The good economic data does suggest that the Fed may hike rates sooner rather than later. This is an indication of the increasing volatility we should all expect as we approach that liftoff."

While Lebovitz said stocks will probably dip once rates move higher -- which he expects in September -- he reminded investors that higher rates signal economic strength.

'We wouldn't be talking about higher interest rates if the economy wasn't capable of standing on its own two feet," he said. "I expect, despite that short-term volatility, longer-term, equity markets will be able to continue their ascent.

As central bank action winds down in the U.S., it's heating up in Europe, amid the European Central Bank's massive $1.2 trillion stimulus, which started in March.

While the S&P 500 has climbed 2.8% since the start of the year, that lags far behind the 19.3% gain by the FTSEurofirst 300, which includes some of Europe's biggest companies. That may create opportunities for investors in both the finance and consumer industries, since the region's economy is largely driven by consumption.

"Europe is much earlier in the state of their recovery, so there is opportunity there, perhaps more so than the U.S.," Lebovitz said. "The bottom line is, don't fight the central bank."

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