US Stock Rally Hits a Wall Near All-Time Highs – US Market Wrap

Wall Street’s rally is showing signs of fatigue due to speculation that stocks have risen too far in the face of economic and geopolitical risks. Long-term Treasuries underperformed. Oil recovered from its biggest two-day drop since 2022. The dollar reached a three-year low.

The S&P 500 fluctuated just a few points from its all-time high. The Nasdaq 100 outperformed major US benchmarks, with Nvidia setting a record. The Russell 2000 index of smaller firms fell 1.2%. The yield spread between 30-year and five-year bonds is approaching levels last seen in 2021. The so-called curve steepening is a bet that the Federal Reserve will eventually cut rates, while worries about debt issuance will put pressure on longer-term maturities.

Traders were keeping a close eye on Fed Chair Powell’s second day of testimony on Capitol Hill, after Fed officials held rates steady last week. According to the Fed chief, the US central bank is still unsure how tariffs will affect consumer prices. He also stated that the United States has the world’s strongest economy, and it makes sense to move slowly in times of uncertainty.

Few times in history has the US market faced as many challenges as it does in 2025: a new president reshaping the global order, sweeping tariffs, and a period of uncertainty fueled by Middle East headlines. While stocks have continued to outperform expectations, there is growing concern that the S&P 500’s multiples are becoming frothy.

On the geopolitical front, Trump announced that the US would meet with Iran next week but questioned the need for a diplomatic agreement on the country’s nuclear program, citing the damage caused by American bombing of key sites.