Bears beware: Case for bull market momentum

The bull market may continue because AI demand, earnings growth, broader participation, and easing inflation have weakened the main bearish arguments.

• AI demand has shifted from uncertainty about customers to shortages of chips, power, memory, data-center capacity, and electrical infrastructure.
• The S&P 500’s forward P/E has fallen to 20.0x from 21.6x at the beginning of 2025 and 22.0x at the beginning of 2026, as earnings and expectations grew.
• Market breadth has improved: the S&P 500 Equal Weight Index is up 16.49% year to date in 2026 versus 13.95% for the capitalization-weighted index, and nearly two-thirds of NYSE stocks trade above their 200-day moving averages.
• Nvidia’s announced $500 billion financing initiative involving major financial institutions challenges the idea that AI infrastructure spending is sustained mainly by circular financing within the same corporate ecosystem.
• The author argues that roughly 250,000 people currently training AI agents could eventually become hundreds of millions, making today’s infrastructure investment look early rather than excessive; the S&P 500 has gained 26.26% in 2023, 25.00% in 2024, 17.86% in 2025, and 13.95% year to date in 2026.

Takeaway: Investors should be wary of fighting the established equity uptrend, although the bullish case depends on continued AI adoption and does not remove the risks associated with valuations, technology, inflation, or geopolitics.