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How Major US Stock Indexes Fared Tuesday 5/12/2026
Quantitative models show that the rally in U.S. stocks is approaching a 'frenzy' zone.
The U.S. stock market has witnessed a historic surge, hitting new highs, but signs of overheated sentiment suggest that this rally may be entering a slowdown phase. The rebound since the March lows has been driven in part by expectations of easing U.S.-Iran tensions and substantial growth in corporate earnings, pushing investor sentiment close to the 'euphoria' range as indicated by Bloomberg Intelligence strategists' quantitative model. This model tracks six indicators, three of which have propelled sentiment to this level: high-yield corporate bond spreads, low volatility, and pairwise correlations. This does not necessarily imply an impending crash: such conditions are typically accompanied by further gains, albeit at a more moderate pace.
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Sudden Glimmer of Hope in U.S.-Iran Peace Talks: Dollar Erases War Premium, Oil Prices Plunge, Global Stocks and Gold Rise in Tandem
Reports suggest that the United States and Iran are nearing an agreement to end the conflict, which has instantly triggered a surge in risk appetite, leading to a decline in the US dollar, a sharp drop in oil prices, and a significant rise in global stock markets.
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