<div id="readability-page-1"><div><div>The S&amp;P 500 hit record highs on Friday as prominent investment manager Dan Niles advised investors to temporarily ignore traditional valuation metrics while positioning for continued market gains through the second-quarter earnings season.What Happened: Niles, founder of Niles Investment Management, reversed his earlier bearish stance after the index rallied 27% from April lows following President Donald Trump‘s 90-day tariff reprieve announcement. The benchmark index surpassed its previous February closing high, rebounding from a 21% selloff that began in early April amid tariff fears and recession concerns.“In my 35 years on Wall Street I have NEVER said that before,” Niles wrote on X, clarifying his CNBC interview comments about forgetting valuations. He emphasized that this tactical approach reflects how he believes investors will behave until Thanksgiving, not his personal investment philosophy.The veteran money manager cited seven factors driving continued market strength: U.S. dollar weakness helping foreign sales that comprise 40% of S&amp;P 500 revenues, demand pull-forward ahead of potential tariffs, reduced geopolitical tensions, anticipated Federal Reserve rate cuts, institutional performance chasing, and retail fear-of-missing-out with $7 trillion parked in money market funds.Why It Matters: Niles maintains positions in Microsoft Corp. MSFT, Nvidia Corp. NVDA, and Cisco Systems Inc. CSCO. He highlighted Microsoft’s re-accelerating Azure growth after three quarterly disappointments and Nvidia’s demand strength following a $5.5 billion writeoff. Cisco trades at 17x forward earnings versus 24x for the S&amp;P 500, despite its emerging AI networking capabilities.However, Niles warned of potential 10-20% correction risks approaching Thanksgiving due to holiday demand disappointment from the first-half demand pull-forward. He noted the S&amp;P 500’s 24x forward price to earnings ratio exceeds historical averages during 2.4-3.0% inflation periods.The index closed Friday at 6,190, with technical analysts noting an approaching “golden cross” signal when the 50-day moving average crosses above the 200-day average—historically preceding strong rallies 73% of the time since World War II.<ul> <li>Apple Has the Potential To Crush Meta's Ray-Ban Smart Glasses, Says Ming-Chi Kuo, But The Tech Giant Has Been ‘Surprisingly Slow'</li> </ul>Photo courtesy: Shutterstock</div></div></div>

CSCO

NVDA

The S&P 500 reached record highs, with investment manager Dan Niles advising investors to overlook traditional valuations for potential market gains. Niles reversed his bearish outlook, citing factors like U.S. dollar weakness and anticipated Federal Reserve rate cuts. He holds positions in Microsoft, Nvidia, and Cisco but warns of a possible 10-20% correction due to holiday demand risks. The index closed at 6,190, with a potential "golden cross" signal indicating strong future rallies.

- The S&P 500 reached record highs as Dan Niles advised investors to overlook traditional valuation metrics for potential market gains during the earnings season.  
- Niles reversed his bearish outlook after a 27% rally since April, citing factors like U.S. dollar weakness and anticipated Federal Reserve rate cuts as drivers of market strength.  
- He warned of a possible 10-20% correction risk by Thanksgiving due to potential holiday demand disappointments, despite the index's current high valuation.

Benzinga

Cisco

NVIDIA

As S&P 500 Charges Off April Lows, Dan Niles Says Investors Will 'Forget About Valuations'—Holds Microsoft, Nvidia, Cisco But Sees Holiday Demand Crash Risk