The market continues to soar and treats any news — bad or good — as fuel for new record highs. The S&P 500 did so after nonfarm payrolls rose by 115k in April and amid rumors of de-escalation in the Middle East. Sadly, Donald Trump called Iran's proposal wholly unacceptable, which increases the risk of a downside gap at the open for the broad index.

Sometimes, making picks and shovels is more profitable than using them. Since the start of the AI boom, investors have bet on the Magnificent Seven, but over the past six months, chipmakers have moved to the fore. They are generating massive revenues, primarily because semiconductors are in short supply — a situation exacerbated by the Strait of Hormuz disruption.

When demand is huge and supply is constrained, the price is destined to rise. This earnings season is unique: S&P 500 corporate profits haven't expanded this fast since Q1 2026 in a long time. Thumbs-up to the chipmakers!

Anomalies draw the attention of big banks. Bank of America highlights the S&P 500's readiness to finish 12 months of double?digit gains for a fourth consecutive year. That has occurred only twice in history — after WWII (in the euphoria of peace) and in the late-1990s dot-com run.

Both scenarios are possible now. Investors have bought into the idea that the Middle East conflict is over, even though it continues. Moreover, deep US–Iran disagreements could trigger renewed geopolitical escalation, higher oil prices and rising Treasury yields as markets price in Fed tightening.

Still, it feels as if the US stock market has adapted to a new reality: Brent around $100/bbl and 10-year Treasury yields near 5%. Investors keep buying the dips under a classic FOMO mindset. The US economy is holding up under White House tariffs, high borrowing costs and rising gasoline prices. GDP continues to expand, and the Federal Reserve has not ruled out easing monetary policy.

Why not embrace FOMO — the fear of missing out? It's propelling the broad index northward.

Technically, the S&P 500's daily chart remains bullish. A downside gap at the open is quite possible, but a bounce from support at the pivot level near 7,315 or a move back above resistance at 7,365 would provide a basis for building long positions on the broad index.