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LivestreamMenuAs the AI-propelled bull market enters its fourth summer, its pace and character remain rather consistent. Beneficiaries of the urgent, unprecedented buildout of computing capacity are carrying the indexes, with timely rotations into the broader array of stocks allowing the leaders to rest periodically. The S & P 500 ‘s annualized total return for the year to date, nearly 23%, exactly matches its yearly rate of appreciation since this uptrend began in October 2022. Still, for all the familiarity and the sturdy nature of the advance, some macro shifts and internal stirrings are worthy of some attention, especially as global tech stocks face a bit of a shakeout overnight Tuesday . Here are a few items from the “Just asking” file that sit top of mind looking into the second half of 2026. Was May 14 a consequential moment for this market, at least tactically? This was the first day the S & P 500 crossed above the 7500 threshold, touching a high of 7517. It would go on to surpass 7600 for one day on a closing basis in the nearly six weeks since without gaining escape velocity. The index closed Monday at 7472. There’s no clear evidence that the May 14 spurt was an important culmination of market themes, though it’s interesting that is was the day the Cerebras IPO began trading – opening at $350 and peaking at $386 after pricing to initial buyers at $185, a show of frenzied AI enthusiasm which crystallized all the buying aggression in the opening moments. The stock is now set to open Tuesday below $220. .SPX YTD mountain S & P 500, YTD May 14 also saw Cisco Systems jump 14% on AI-juiced quarterly results, another instance of buyers rushing into the older and slower-moving legacy plays on an all-consuming spending binge. The same day witnessed the President Trump-President Xi U.S-China state dinner, which initially was taken as a risk-mitigating moment that could help speed an Iran agreement. Since that date, the Philadelphia Semiconductor ETF has continued to defy gravity, adding 20%, while the Magnificent 7 as a group is down 10%. The market is ferociously punishing the capex “spenders” while bidding wildly for the “vendors” in memory and infrastructure chips. Is it healthy for the tech trade to lose the help of hyperscalers along with software, to be sustained only by hardware makers feasting on supply bottlenecks that serve as a tax on the rest of the industry? The action since then could be seen as another “broadening” phase of the bull market (banks and other cyclicals have outperformed the S & P 500, for instance), though as noted many times, a broader market is not always a more stable or rewarding one if it means the dominant drivers of the bull market are getting either overplayed or are tiring out. What will come out in the Warsh? New Federal Reserve Chairman Kevin Warsh made waves on Wall Street , as intended, by promising less transparency and guidance about upcoming policy moves, while putting in motion institutional-reform efforts. The net takeaway is that Warsh wants to keep markets guessing, allowing its own pricing mechanisms to react to data and handicap scenarios. Implicit in this world view, though, is that under a regime of forward guidance and ample Fed transparency, market volatility has been dampened artificially, funding discipline on the Federal government has been lacking and asset values are higher than they otherwise “should” be. On paper, free-market purists surely find this preferable. But this approach rests on some debatable assumptions. The Fed balance sheet, at $6.7 trillion, is 25% smaller in nominal terms than at its 2023 peak. As a proportion of U.S. annual GDP, it is back to 2013 levels. Relative to total Federal debt, it is equal to where it was in late 2008. So even if the Fed’s securities holdings play a role in driving the economy or subsidizing government borrowing, the balance sheet has less impact on the overall economy or in enabling Federal deficits than they have in years. What’s the emergency that requires a response here? Wall Street observers who support Warsh suggest a less-obtrusive, quieter Fed would represent a return to a purer time, last seen under the recently deceased Alan Greenspan . Is it a telling clue or a mere coincidence that it was under such an opaque central bank that storied macro investors such as Stanley Druckenmiller – former colleague of Warsh and of Treasury Secretary Scott Bessent – made their fortunes in part by reading market vibrations and moving one step ahead of the market? While properly lauded for keeping inflation in check while allowing a productivity boom to flourish in the late-1990s, Greenspan also presided over – or even engineered – a 1994 bond-market crash, was there for the 1998 hedge-fund blowups that imperiled world markets, and ultimately failed to constrain a tech-investment bubble that gave way to a recession and a devastating bear market from 2000-2003. Some of the themes from then might soon echo, if the Fed sees the need to restrain a galloping tech-capex boom with tighter policy. A month before the March 2000 market peak, Greenspan told Congress, “The Federal Open Market Committee will have to stay alert for signs that real interest rates have not yet risen enough to bring the growth of demand into line with that of potential supply. Achieving that alignment seems more pressing today than it did earlier.” What did the big oil bulls miss? Nearly every step of the way since the outbreak of fighting in Iran in late February, through the longer-than-contemplated closure of the Strait of Hormuz, oil prices undershot popular forecasts of a truly dislocated market. Wall Street firms comfortably penciled in $150 oil or worse, and then projected a slow decline due to depleted inventories. The 25% drop from wartime highs in to the mid-$70s per barrel leaves crude at easily digested levels for the U.S. economy and relieves heavy pressure on the rest of the world. Will energy forecasters need to reckon with the relatively benign price action? Does it all amount to there having been more oil in storage and on the oceans than was understood before? Were China’s swift cuts in usage decisive? The post-mortems will be fascinating, even if WTI finds a way to bounce off its 200-day moving average and rebuild some “risk premium.” Is there a chance the markets collectively intuited that this could prove to be the last-ever oil shock? Has the massive installed base of renewable energy and their accelerating buildout in response to this crisis persuaded investors that oil’s role as a macro swing factor and geopolitical weapon is waning even more quickly than before? Something to contemplate, at least. Does anyone still hate this bull market? Overall investor positioning right now is a bit nuanced. Goldman Sachs’ Tony Pasquariello pegs client hedge funds’ posture as +8 on a scale of -10 to +10. In other words, quite long equity risk. Household stock exposures are decidedly elevated relative to history. Put-call ratios have shown extreme bullish aggression. Surveys are less clear, though, not sitting at extremes. And Deutsche Bank’s aggregate investor positioning gauge is neutral. What’s clear, though, is that sell-side analysts are as bullish as they’ve been in the post-financial-crisis era. FactSet tracks the distribution of individual stock ratings; there have not been a higher proportion of Buys back to 2009. Quite likely, this simply reflects the forceful corporate-earnings momentum working its way through analysts’ stock-valuation models. Whether this is a comfort or not is a fascinating debate. The notion of an “earnings bubble” has been in the air, as massive AI-equipment spending shows up on other companies’ books as profit, yet the cost to the spenders is only recognized slowly over time as the hardware depreciates. Danger sign or not, it’s hard to make a case that the Street is going out of its way to cast a skeptical eye on the fundamentals.
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