Mixed Signals in a Market at New Highs | Steve Henderly, CFA
Printer Friendly PDF: June 2026 Commentary
Whether red hot or ice cold, ever notice how the stock market rarely feels comfortable? Sometimes it falls sharply with little warning. Other times it climbs relentlessly despite numerous worrisome headlines. The S&P 500 added eleven new record highs in May. The market hit a low on March 30 following the Iran War and Strait of Hormuz closure. In the 42 trading days since this most recent low, the S&P 500 index advanced 18%! That places the rebound among the strongest short-term rallies since 1950. Yet consumer confidence is sitting at/near the lowest levels ever recorded due to a war that is not resolved, elevated oil prices, and rising interest rates due to building inflationary pressures. How can both be true? How can investors celebrate while consumers are deeply concerned? Two questions keep surfacing in the financial press and conversations with clients:
(1) Is this another late-1990s technology bubble destined to burst?
(2) Is the market’s strength justified based on a genuine productivity revolution made possible by adoption of AI and robotics? To borrow from Buzz Lightyear, can markets go “to infinity and beyond”?
We believe the honest answer lies somewhere in between: it’s neither as frightening as the first scenario nor as effortless as the second. Understanding that distinction matters.