Despite the fact that US interest rates are at multi-decade highs, US stocks have repeatedly hit new highs, with major benchmark indices rebounding since last October.
The NASDAQ Composite Index surpassed the 17,000-point mark in May, rising more than 9 times in the past 20 years, and the S&amp;P 500 has closed higher in 6 out of the past 7 months. Even analysts are finding it difficult to keep up with the gains in US stocks.
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At the same time, the surge in US stocks has also raised concerns about whether the US stock market can continue its upward trend in the coming months. Wall Street analysts are divided, reflecting the increasing uncertainty in the market about the sustainability of the bull market.
Brian Sozzi, Editor-in-Chief of Yahoo Finance, believes that tech stocks may not be as healthy as they appear, and popular tech stocks may experience a pullback this summer; Matejka of JP Morgan believes that the summer gains in US stocks may be limited; and the well-known Wall Street bear Wilson, who previously turned bullish on US stocks, still holds this view.
<h2>Yahoo Finance Editor: NASDAQ's sharp rise worries me, a correction is coming this summer</h2>
The AI revolution is currently driving a wave of technological prosperity, boosting the valuations of companies such as NVIDIA, Anthropic, and OpenAI.
In the latest AI developments last week, HP revealed that the company's earnings per share guidance for the quarter exceeded expectations, partly due to the launch of higher-priced AI PCs in mid-June. While pet supplies e-commerce company Chewy did not directly mention AI, it can be seen that it is driving better sales and profit margins.
However, there have been setbacks in AI development as well, with Salesforce's poor performance and guidance coming as a surprise. Despite the company's introduction of a series of new AI products, its guidance remains weak.
In response to this, Brian Sozzi, Wall Street industry strategic analyst and Editor-in-Chief of Yahoo Finance, stated:
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I don't think the NASDAQ is about to enter a summer bear market, but rather that the current situation in the tech industry may not be as healthy as it seems, and popular tech stocks may experience a pullback this summer as investors reassess their valuations.
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Brian pointed out:
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While the NASDAQ hovers near new highs driven by certain individual stocks like NVIDIA and Apple, fewer and fewer stocks are able to stay above the 50-day and 200-day moving averages.
This divergence is also reflected in the performance of specific stocks, with some consumer stocks like Dollar Tree (DLTR) and Lululemon (LULU) lagging behind the broader market, and the performance of some artificial intelligence-related companies like Workday (WDAY) and Autodesk (ADSK) also not being ideal
As Wedbush analyst Dan Ives put it, this is a so-called &#34;concentration of gains&#34; market, where investors are simply betting on pure AI players like NVIDIA and Apple, leaving other tech stocks behind.
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Looking ahead, Keith Lerner, Chief Market Strategist at Truist, stated that the rebound of the 10-year U.S. Treasury yield from a low of 4.3% to above 4.6%, combined with factors such as the upcoming June election, may continue to suppress the performance of non-tech sectors.
<h2>Divergent Views from Morgan Stanley and JP Morgan</h2>
Morgan Stanley and JP Morgan hold divergent views, with one bearish on and bullish on small-cap stocks, while the other bullish on and bullish on large-cap stocks.
Regarding the future trend of the U.S. stock market, Mislav Matejka, an analyst from JP Morgan's strategy team, stated in a report to clients:
<blockquote>
We believe that the summer market rally will be limited, as the market generally expects future deflation, but at the same time believes that the economy will not experience a &#34;hard landing&#34; and is optimistic about profit acceleration. The inconsistency between these two expectations will limit the market's upside potential.
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Matejka further stated that he expects a rebound in small-cap stocks in the second half of the year, but more so in the European markets than in the U.S. The main driver is the expected start of an interest rate cut cycle in Europe, where local economic activity may outperform that of the U.S. For the U.S., these positive factors are not as clear.
In contrast, Morgan Stanley analyst Michael Wilson believes:
<blockquote>
His bullish argument remains valid, as long as the bond market does not send any distress signals, the continuously rising government debt will continue to stimulate spending, thereby boosting asset prices including stocks.
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It is worth mentioning that Wilson is one of Wall Street's most famous bears, who has been consistently bearish on the U.S. stock market, but made a 180-degree turn in May, raising his target for the S&amp;P 500 index by 20% from 4500 points to 5400 points, shifting from being among the most bearish on the index to predicting a record high.
Wilson stated:
<blockquote>
The slight rebound in the S&amp;P 500 index after holding above the 50-day moving average last Friday is a bullish signal. Considering the rebound, the bullish argument should still prevail in the short term, but if the data in June continues to be mixed, sentiment may reverse again.
</blockquote>
Furthermore, Wilson advised investors not to chase after low-quality stocks with poor fundamentals. Wilson is skeptical about the massive flow of funds from tech stocks to consumer stocks and small-cap stocks, believing that in terms of risk-return over the next few months, large companies are more attractive.

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Yahoo Finance's Executive Editor Brian Sozzi believes that popular tech stocks may experience a pullback this summer; Morgan Stanley's Matejka believes that the summer rally in US stocks may be limited; while the famous Wall Street short seller Wilson, who recently turned bullish on US stocks, still holds onto this view

The US stock market has repeatedly hit new highs, where to next? The bullish and bearish views on Wall Street are intensifying