Goldman Sachs' equity sentiment gauge just printed 1.7 — a level that screams 'stretched positioning' — while hedge funds staged the largest risk unwind since the 2021 meme stock era, slashing exposure to mega-cap tech leaders. And yet: the S&P 500 and Nasdaq closed at all-time highs, with the S&P up 58 points and the Nasdaq up 258. The market heard the warning and ordered dessert anyway.
What's fueling the bull case? Take your pick. Reports of a US-Iran memorandum of understanding to end the two-month war and potentially reopen the Strait of Hormuz sent futures surging. $AMD jumped nearly 19% on blowout Q1 results and AI-driven data center demand. $UBER popped ~9% on gross bookings up 21% year-over-year. ADP private payrolls came in at 109,000 vs. an 84,000 estimate. Even $NVO surged over 9% in Copenhagen on obesity pill momentum. The bull thesis is basically running a relay race with fresh legs every hour.
The bears do have receipts: gas is averaging $4.50/gallon nationally, BlackRock's Rick Rieder flags a massive disconnect between buoyant equities and a bond market absorbing $520 billion in weekly Treasury supply, and Anthropic's Dario Amodei just told a room full of important people that Chinese AI will match the US in 6 to 12 months. The S&P forward PE sits at ~25x — elevated, but still below last year's 28x peak. Sentiment is 'cranky' and disbelieving, which historically is either a contrarian buy signal or the last words before a correction — and the market has decided it's the former, at least for today.
