Key facts
- The S&P 500 index extended its winning streak to nine consecutive days.
- The index reached a new record high above 7600.
- The rally is attributed to the artificial-intelligence trade and hopes for conflict resolution.
- Strong Q1 earnings momentum (FEMO) is supporting the market.
- Geopolitical risks, including potential oil price spikes and Fed policy shifts, are noted concerns.
The S&P 500 index has extended its winning streak to nine consecutive days, reaching a new record high above 7600 for the first time. This rally is primarily attributed to renewed enthusiasm for the artificial-intelligence trade, with analysts noting strong earnings momentum (FEMO) as a sustainable driver. Hopes for an agreement to end a global conflict are also contributing to market momentum. However, caution is advised due to ongoing geopolitical risks, including potential oil price spikes to $150 a barrel or higher as global inventories are reportedly low, and the possibility of the Federal Reserve shifting from an easing bias to a tightening bias, potentially leading to a rate hike in July. The yen traded close to the 160-per-dollar level. Asian stocks are expected to track Wall Street higher. The AI boom may be spreading to Main Street, providing a tailwind for the economy and labor market.