Despite recent warnings and divergences, such as the Transportation sector falling while semiconductors surged, the S&P 500 may be poised for further gains. Historically, sharp divergences between these sectors preceded semiconductor corrections, but current analysis suggests a more bullish outlook.

Global liquidity remains a key tailwind for the equity bull market. However, the U.S. Treasury market presents a significant risk. Events in September 2024 and April 2025 demonstrated how Fed policy and trade policy can impact long-term yields, forcing policy shifts. The Treasury market faces a $12 trillion debt wall amid shrinking demand.

Foreign central banks are reducing their holdings of U.S. debt due to sanctions risk and are diversifying into gold. Simultaneously, U.S. tech giants are issuing record amounts of corporate bonds to fund AI infrastructure, competing with Treasuries for investor capital. The bond market's stability is crucial for the current rally.