The S&P 500 has reclaimed its February record peak after recovering from a 20% loss in recent months. Despite concerns over valuations, earnings, and market sentiment, the index has shown resilience. With forward projections higher than expected, Big Money is still under-invested, supporting prices. A strong market recovery suggests a potential exuberance phase ahead, but technical oversights remain.
The S&P 500’s recent pullback on news of President Trump’s trade talks with Canada has clarified the market’s outlook, with investors now banking on no re-escalation of trade frictions. The equity-market rally may have provided comfort in the baseline U.S. economic-growth picture than the data might support.
The first half of 2025 has unfolded in a relatively normal manner, but this is not typical for third-year bull markets and post-election years. Historically, such periods tend to be rockier and less rewarding. However, the market’s trajectory over the past several months bears some resemblance to previous instances, such as the rallies off the lows in 1998 and late 2018.
While new highs are generally bullish, the S&P 500 has made only a small percentage of stocks reach their 52-week high along with the index itself. The median S & P 500 stock remains below its own 52-week high, and technical oversights remain in place. Nevertheless, the market’s recent performance suggests a potential exuberance phase ahead, driven by Big Money still feeling under-invested.
The recent run-up in capital-market stocks, such as Goldman Sachs and JPMorgan, supports this view. Circle Internet Group’s IPO and subsequent price surge also indicate a “fun-seeking” sentiment among traders. As long as the S & P 500 remains supported by under-investment from Big Money, prices may continue to rise, potentially leading to an exuberance phase of some dimension.
Source: https://www.cnbc.com/2025/06/28/stock-market-reclaims-february-record-peak-how-the-fundamentals-and-technicals-look-now-vs-then.html