The Nasdaq and S&P continue to reach new highs. Have you hopped on board yet?

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S&P back above water: Return of the bull market or FOMO trap?

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Over the past month, as US-Iran negotiations have released positive signals, the US stock market has experienced a strong rebound from its lows. The Nasdaq 100 index achieved a 'ten-day winning streak' and is approaching its historical high. Although a formal agreement has not yet been reached, the substantive restraint shown in geopolitics has led market participants to already price in a 'peace expectation.' Looking ahead, the AI industry's logic remains a core support, but when FOMO (Fear of Missing Out) sentiment pushes the index to previous high resistance levels, the risk-reward ratio for short-term chasing of gains has significantly decreased. The market is expected to maintain high volatility throughout the year, and investors should be wary of overly optimistic expectations being priced in too early. It is recommended to adopt a prudent strategy of 'holding core positions and waiting for a pullback to build light positions.'

1. Market Performance: Nasdaq 'Ten-Day Winning Streak,' US stocks recouping losses

Image Source: Futubull

After experiencing panic selling in March (the 'golden pit'), the US stock market has rebounded strongly from its lows as US-Iran negotiations showed signs of progress.

- Nasdaq 100 Index: As of the close on April 14th, the Nasdaq 100 delivered an impressive performance - with ten consecutive trading days of gains, marking the longest winning streak since 2021. After finding support at the 250-day moving average (commonly regarded as the dividing line between bull and bear markets) at the end of March, the index has rebounded by over 12%. Currently, the Nasdaq is just one step away from its historical high in October last year (with only about a 1.1% gap).

– S&P 500 Index: The S&P 500 has also shown solid performance, having largely rebounded to pre-conflict levels. Its annual return has turned from negative to positive, moving back 'above water.'

– Structural trends: In this round of rebound, the leadership position has shifted to previously heavily shorted, long-duration (interest rate sensitive), and high-beta growth stocks. This indicates that the market is switching back from 'defensive mode' to 'risk-on mode,' with investors beginning to reprice the future.

II. Market Sentiment: Expectations of 'front-running' amid uncertainty

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Although no formal agreement has been signed between the US and Iran yet, the mindset of market participants has undergone a subtle but significant shift.

1. Current Situation: Restraint and hope coexist

From a geopolitical perspective, despite ongoing external noise, Iran’s response so far has demonstrated a considerable degree of restraint, which carries significant weight in investor assessments:

– Houthi forces backed by Iran have not escalated conflicts substantially in the Red Sea region.

– The frequency of drone attacks has not increased significantly.

– Key ceasefire agreements have not been explicitly broken.

Reports from multiple US media outlets confirm that the US and Iran are still engaged in close behind-the-scenes negotiations. Trump's comments on April 13 further fueled market optimism, as he expressed 'certainty' that Iran would eventually agree to abandon its nuclear program.

Image Source: Futubull

2. Investors' Logic: Ignore Distractions Directly

It may be premature to declare the complete end of the geopolitical crisis, but Wall Street seems to have already anticipated the outcome. The market widely believes that the recent fluctuations are more about both sides leveraging their bargaining chips at the negotiation table rather than a precursor to full-scale conflict.

This 'preemptive move' mentality has led investors to directly ignore short-term disruptions, attempting to position themselves ahead of any finalized agreement to avoid missing out on a rebound. The strong counterattack in the stock market essentially reflects the market’s early anticipation of a 'peaceful resolution.'

Image source: X

3. Forward-Looking Perspective: Avoid FOMO, Seek Truth Amid Volatility

At this moment, what investors need most is to objectively assess risk and reward, avoid EMO (emotional pessimism) at lows, and control FOMO (fear of missing out) at highs.

1. Core logic remains solid

For high-quality core positions, especially in hard tech sectors related to AI, it is recommended to continue holding (HOLD).

The underlying growth logic of the AI industry has not been disrupted by geopolitical conflicts, and the performance support for the computing power sector remains robust. This is a 'long slope with deep snow' track, and one should not easily exit due to short-term noise.

2. The 'Entry Logic' for Light Position Investors

For investors who previously held lighter positions, there is no need to feel anxious, as the risk of chasing gains at the current level is relatively high and the risk-reward ratio is not ideal.

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- Optimistic expectations have been fully priced in: The market is currently in a typical FOMO (Fear of Missing Out) sentiment, with current stock prices already reflecting almost all the most optimistic outcomes, such as 'the end of the war, interest rates remaining unchanged, and the completion of tech stock adjustments.'

- Technical pressure: The index is approaching the previous high-pressure level from October 2025. Without more unexpectedly positive catalysts, profit-taking resistance is highly likely to occur in the short term.

3. Future Strategic Approach

The US stock market for the entire year of 2026 will likely remain characterized by high uncertainty and volatility. In this macroeconomic backdrop, the market will often provide multiple 'entry' opportunities.

- Don't worry about missing out: A 'golden pit' similar to that of March may appear again.

- Strategy recommendation: If a pullback occurs in the future due to policy disruptions or localized conflicts, it is advisable to position on the left side (when negative news has been fully priced in and the market is in widespread despair), rather than entering when everyone is euphoric and the index is peaking. For example, the chart below shows Pandu's analytical framework from late March, when market expectations for the four major sources of uncertainty had dropped to their lowest point, becoming an indicator of a阶段性 low, making it suitable to start gradually increasing positions.

The market has already moved ahead with 'peace,' and investors need to maintain a sense of rationality amidst the euphoria. Stick to your core strategy and patiently wait for the next comfortable zone in the market cycle.

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