Investors greeted the long weekend with a mixed backdrop of Iran‑related headlines and a Brent crude price slipping below $100 a barrel. Yet equity markets stayed buoyant, shrugging off higher U.S. Treasury yields that have nudged the S&P 500’s rally into narrower AI‑driven stocks. HSBC’s multi‑asset team continues to flag a “tactically max” overweight on equities despite the yield pressure.

The index’s broadening suggests risk appetite is still alive; the equal‑weight S&P 500 outperformed the cap‑weighted version for the first time since February, and SpaceX’s IPO filing sparked fresh enthusiasm for high‑growth offerings. Analysts at Absolute Strategy Research note the S&P 500 has more than doubled since October 2022, while short‑seller Carson Block warns that passive inflows may be masking underlying valuation concerns.

Ian Harnett of ASR cautions that today’s valuations are high and retail participation heavy, but he sees no immediate trigger beyond a surprise cyber event or a sudden energy price spike. Tightening monetary and fiscal policy will sharpen market reactions to any negative shock, meaning the current rally rests on optimism about AI progress and a potential reopening of the Strait of Hormuz.