The S&P 500 has reached record high levels for the second day in a row, with investors piling into riskier stocks. However, market sentiment signals excessive optimism, according to Ned Davis Research analyst London Stockton. This could lead to a pullback.
As of Saturday evening, the S&P 500 was up 0.6% and on track to build on yesterday’s record close. The Nasdaq Composite followed closely behind with a 0.3% gain, just shy of its own record from Monday. The Dow Jones Industrial Average rose 415 points, or 0.9%, bringing it within striking distance of its December 4th record.
The current market is in the midst of the second-quarter earnings season, with stocks boasting high valuations. Recently, Texas Instruments saw its shares plummet due to concerns over tariffs. Alphabet and Tesla will report their earnings results later today.
Despite the strong gains, some analysts warn that the market may be due for a correction. With excessive optimism prevailing among investors, the possibility of a pullback cannot be ruled out.
Source: https://www.barrons.com/livecoverage/stock-market-news-today-072325/card/the-market-is-frothy-it-s-vulnerable-to-a-pullback–iKOQGC9e4a8nPQ7bMKmQ