US Equities

What's Happening in US Equities

US equities are trading at record highs despite rising Treasury yields, a disconnect that normally signals trouble but instead reflects outsized gains in mega-cap technology stocks—Nvidia, Microsoft, Meta—that are driving index performance while broader market breadth remains uneven. The strength persists even as individual names face deteriorating fundamentals: Reddit shares collapsed on weak search referral traffic, signaling that valuation compression is selective rather than universal across the market. Historical patterns suggest equities typically rally in the year following midterm elections as investors recalibrate positioning around shifts in congressional control and expected policy changes, though the current rally appears driven more by concentrated earnings growth in AI-adjacent names than by broad-based economic optimism or legislative tailwinds. Energy infrastructure plays like GE Vernova have participated in the Tuesday buying surge, but without clarity on the underlying catalyst—whether interest rate expectations, energy demand, or infrastructure spending outlook—the durability of that move remains unclear.