Happy days are here again! The S&P 500 Index (^SPX) and Nasdaq rose to record highs Wednesday, which just happened to be tax day. What's all the excitement about? Here’s my take, writes Ed Yardeni, editor of Yardeni QuickTakes.
First, the AI bubble hasn't burst, so far. Instead, hyperscaler stocks are leading the charge since the stock market bottomed on March 30.
(Editor’s Note: Ed is speaking at the 2026 MoneyShow Masters Symposium Las Vegas, scheduled for July 20-22. Click HERE to register.)
Second, the private credit bubble may be losing some air. But it isn't bursting, while banks are still lending.
Third, real GDP slowed during Q4 2025 and Q1 2026...but some of that was related to bad weather. As Chauncey Gardiner correctly predicted, “There will be growth in the Spring.”
In any event, S&P 500 earnings rose at a faster pace during the past two quarters to fresh record highs. And investors fear missing out on peace (FOMOOP) in the Middle East.
Before the war started, we anticipated a stock market pullback because our two favorite Bull-Bear Ratios were too bullish. At the end of the day on March 31, we said the market bottomed on March 30, partly because these two contrarian indicators had turned too bearish. They both rebounded over the past week, but remain relatively bearish – which is bullish from a contrarian perspective.
It feels like the Roaring 2020s are back, given the strong V-shaped recovery in stock prices since March 30. So, what could possibly go wrong? Obviously, the war could flare up again. Or oil exports might remain blockaded in the Arabian Gulf, causing oil prices to rise again.
