S&P 500 Sits 0.5% From All-Time High as Capital Floods Back Into Equities

The rally on Wall Street is closing in on a significant milestone. The S&P 500 is now simply 0.5% from its all-time high of seven,002 recorded in January 2026

The index has turned constructive for the yr after a strong rebound that has added practically $6 trillion in market worth since March 30. That restoration interprets to roughly $550 billion per buying and selling day over 10 consecutive classes, with Tuesday marking the index’s inexperienced day.

The S&P 500 Nears Its All-Time High, and the Rally Isn’t Slowing Down

What makes the rebound significantly notable is that it started in opposition to a backdrop of geopolitical tensions between the US and Iran. Although each side agreed to a two-week ceasefire, failed diplomatic negotiations and the US’s blockade of the Strait of Hormuz have continued to gasoline uncertainty.

Even so, markets have proven outstanding resilience, with equities pushing greater regardless of the overhang of geopolitical threat.

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BeInCrypto reported that Citadel Securities executives see room for upside in each shares and bonds, arguing that the worst-case tail threat from the Iran battle has been “considerably truncated.” 

Separately, Bitmine’s chairman, Tom Lee, said last week that a inventory market backside is already in. He projected that the S&P 500 may climb as high as 7,300 to mark a brand new all-time high this yr.

Hedge Funds Unwind as Sidelined Capital Returns

The shift in positioning tells the story. The Kobeissi Letter famous that in simply 5 buying and selling days, hedge fund short exposure to US ETFs dropped from the very best degree since May 2025 to beneath the 97th percentile of circumstances during the last 5 years.

“Meanwhile, the capital that was sidelined amid the Iran War is shortly rotating again into AI shares. Stocks like Nvidia and Apple have been practically half as low cost as Costco and Walmart on a Forward P/E foundation after the current correction,” the analysts said. All whereas 4% inflation is again and traders are trying to find any supply of yield as a hedge. Record highs are on the horizon.”

However, the rally is pushing valuation metrics into historic extremes. Global Markets Investor reported that the Buffett Indicator has risen to 232.6%. That marks the very best studying in historical past.

The indicator is used to evaluate whether or not a inventory market is overvalued or undervalued relative to its underlying financial system. A price above 100% normally signifies that the previous is the case.

The present determine sits properly above each the 2000 Dot-Com Bubble peak of 162.6% and the 2021 market high of 218.7%.

“Since the Great Financial Crisis low, the ratio has risen +163.6 proportion factors, or greater than 3 occasions. US equities are in uncharted territory,” the submit revealed.

Overall, it factors to a market that’s traditionally costly and probably weak to corrections. Thus, whereas momentum stays bullish and a recent report high seems inside attain, the backdrop is turning into more and more advanced.

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