Finance

Is the U.S. Bull Rally Losing Momentum?

The Nasdaq has seen a decline of over 3% in the past week, prompting discussions about the potential for further downturns. Geopolitical tensions and market valuations are key factors influencing investor sentiment, while strong corporate earnings provide some support.

Recent market fluctuations raise questions about the sustainability of the current rally.

TradingBase News Intelligence
· 2 min read
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Executive summary

The Nasdaq has seen a decline of over 3% in the past week, prompting discussions about the potential for further downturns. Geopolitical tensions and market valuations are key factors influencing investor sentiment, while strong corporate earnings provide some support.

Over the past five days, the Nasdaq has fallen more than 3%. While the case for a further decline may appear strong, several factors warrant consideration. Geopolitically, tensions in the Middle East have escalated, leading to higher oil prices and concerns regarding a more aggressive Federal Reserve. However, the White House is likely to avoid prolonged conflict, as it could adversely affect Republican prospects in the upcoming midterm elections. A recent POLITICO poll indicates that support among MAGA voters for the war has decreased from 50% in May to just over one-third, with nearly one in five advocating for the U.S. to withdraw regardless of the economic implications.

In terms of market valuation, FactSet reports the S&P 500's forward 12-month P/E ratio at 20.1, slightly above its five-year average of 19.9 and ten-year average of 19.0, but below the 20.4 level recorded at the end of Q2. Corporate earnings remain robust, particularly among large technology firms, with 86% of S&P 500 companies reporting positive EPS surprises and 80% showing positive revenue surprises.

Concerns are mounting regarding semiconductor stocks, particularly as significant investments by companies like Nvidia in data centers may not yield expected returns. Reports of a state-backed Chinese firm producing DUV lithography equipment and profit-taking after a strong rally are adding pressure to the sector. Nonetheless, demand for AI chips remains high, and earnings continue to grow.

Before considering a bearish position on the U.S. market, it is important to note that the Strait of Hormuz could reopen soon, and major tech companies, including Microsoft, Meta, Apple, and Amazon, may report stronger-than-expected returns from AI investments. Additionally, even if risks materialize and conditions worsen, markets can remain irrational longer than investors can remain solvent.

Market impact

This article presents verified public information. Price reaction depends on liquidity and what was already priced in — no directional call is made here.

Institutional framing

TradingBase presents market updates in an institutional financial-news format. This is not investment advice.

Market watch

Track the economic calendar at Economic Calendar, price action at Markets, and signals at Signals.

NIC · Impact scores

Global: 100 · Market: 100 · Urgency: 60 · Confidence: 90 · Neutral

Themes: rates, geopolitics, energy, crypto

Asset impact

  • Oil — Neutral (55) · Oil mentioned with balanced cues.
  • ETH — Neutral (55) · ETH mentioned with balanced cues.
  • US Stocks — Neutral (55) · US Stocks mentioned with balanced cues.
  • Bonds — Neutral (55) · Bonds mentioned with balanced cues.
  • Commodities — Neutral (55) · Commodities mentioned with balanced cues.
  • Indices — Neutral (55) · Indices mentioned with balanced cues.

Market reaction

  • USOIL: Price snapshot pending · T-15m / T0 / T+15m / T+60m
  • ETHUSD: Price snapshot pending · T-15m / T0 / T+15m / T+60m
  • SPX: Price snapshot pending · T-15m / T0 / T+15m / T+60m
  • US10Y: Price snapshot pending · T-15m / T0 / T+15m / T+60m
  • DJP: Price snapshot pending · T-15m / T0 / T+15m / T+60m
  • US30: Price snapshot pending · T-15m / T0 / T+15m / T+60m

Trading insight

Analysis only. Not a trade signal. Not investment advice. No Entry/TP/SL is generated by NIC.

Scenarios

  • Two-way reaction likely until the market digests the data surprise vs forecast.
  • Whipsaw risk is elevated inside the first 15–60 minutes after release.
  • Watch correlated assets for confirmation rather than reacting to the headline alone.

Watch factors

  • Actual vs forecast surprise (priced-in risk)
  • USD / yields impulse if macro-sensitive
  • Liquidity and spread during the news window
  • Follow-through after T+15m / T+60m
  • Relative reaction in oil
  • Relative reaction in eth
  • Relative reaction in us_stocks
  • Relative reaction in bonds

Related events

Knowledge links

MarketsCentral BanksInterest RatesOilEquitiesCryptoAICorporates

References

Disclaimer: For informational purposes only. Not investment advice.

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