Despite global turmoil, investors continue pushing stocks to record highs. War in the Middle East, energy shocks, and AI concerns have failed to cool enthusiasm as major indexes reach new peaks. Institutional investors now hold 50% more in stocks than their benchmarks, the highest level since January 2022.

Wall Street shows particular favor for cyclical stocks, which now exceed defensive holdings by the widest margin since 2018. The Dow Jones Industrial Average recently notched its first record since February, closing around 50,580. Meanwhile, the S&P 500 wrapped up an eighth consecutive week of gains, its longest such streak since December 2023.

Strong earnings underpin the rally, with S&P 500 companies reporting a 28% jump in first-quarter profits. "All of the ingredients of this rally have held in there," said David Bahnsen, chief investment officer of the Bahnsen Group. Middle East peace hopes and solid corporate results have eased concerns about profit sustainability.