Recently looked at some market data, and I feel there's something interesting behind this rally in the U.S. stock market. It’s been rising for 13 consecutive days to new highs. Many people are asking if there’s still an opportunity or if they should wait for a big pullback. I’ve carefully analyzed it and found that this rally might really not be just a flash in the pan.

First, let’s talk about the war risk, which everyone has been most worried about lately. The situation with Iran—both Trump and Iran have indicated they are willing to open the Strait of Hormuz—has clearly reduced uncertainty. But the key isn’t the war itself; it’s oil prices and inflation. I looked at historical data, and most wars have little impact on the stock market; the real damage comes from inflation pushing up interest rates by the Federal Reserve.

Although current oil prices are still above 80, higher than before the war, how about inflation data? I did an analysis, selecting 47 indicators out of over 300 inflation-related items that best reflect the real situation. The results are clear: despite the overall CPI rising due to oil prices, actual inflation is continuing to decline. The five-year inflation expectations in the bond market are also stable at a low 2.1-2.2%. This means the Fed is unlikely to raise interest rates and will find it hard to delay rate cuts. So, the war risk at this point has basically passed.

How about the macro environment? In March, new employment was 178k, which looks good, but combined with February’s data, the average monthly increase is only 23k, so employment remains under pressure. However, the unemployment rate is well controlled at just 4.3%. More importantly, consumer data is particularly strong. JP Morgan’s earnings report shows that credit card spending in Q1 2026 increased by 9% year-over-year, and Bank of America’s data is even more exaggerated, with consumption growth reaching a two-year high, excluding the effect of rising gasoline prices. The core driver behind this is the wealth effect among high-income groups, and this trend is continuing.

Overall, this is the macro environment that the stock market loves most—inflation is predictably declining, employment is under pressure but still holding up, and consumer spending is exceptionally strong. There’s no threat of rate hikes, and no need to worry about a recession.

But that’s not the most interesting part. Recently, corporate earnings have experienced a bizarre surge, which is the real big story. Besides energy and defense stocks benefiting from war, the most critical is AI. Over the past two months, demand in the AI industry has been booming, directly boosting earnings expectations for chipmakers, big tech, and power companies collectively. The forward earnings growth of the S&P 500 has reached 16% a year ago, far above the historical average of 8%.

Regarding AI monetization, the market’s previous biggest concern was excessive investment without seeing returns. That worry has recently started to change noticeably. Anthropic’s ARR data is crazy—rising from $9 billion at the end of last year to $30 billion in just one quarter, a 330% increase. This is now comparable to Salesforce’s scale. After Meta released new models, their stock price rose 30%. More importantly, it shows that progress in large models isn’t random; it can be achieved through execution. Amazon CEO Jassy has even made an unprecedentedly aggressive statement, pledging to continue investing heavily in AI. The market not only hasn’t punished this but has responded positively.

All three of these developments happening simultaneously indicate that the market’s attitude toward AI has shifted from cautious skepticism to gradual acceptance. The inflection point may have already arrived, even earlier than my most optimistic expectations.

In summary, war risks have dissipated, the macro environment remains solid, and AI sentiment has turned positive. The risk in the U.S. stock market has significantly decreased. Some ask if the 13-day rally will pull back, while others want to wait for the next opportunity. My view is that, under the backdrop of the Fed continuing to cut rates and AI sentiment shifting, the risk of missing out is actually higher than the risk of a correction. Unless an unpredictable black swan appears, it’s unlikely to see a large-scale pullback again.

At the beginning of the year, I said the U.S. stock market could reach 7,800 points by the end of the year. But this analysis makes me think that might still be too conservative. 8,200 points is actually quite achievable. The process won’t be smooth sailing, but for me, these risks are relatively manageable. What’s more worth paying attention to is the long-term opportunity—right now, the U.S. stock market is just getting started.

As for how to position, it’s about selection rather than chasing highs or panic selling. The second half of the year will be a market dominated by opportunities, and focus is key. My personal focus is on AI, especially companies with high flexibility and explosive potential. While foundational giants like Nvidia and TSMC will definitely benefit, I’m more optimistic about application-layer companies—risk is higher, but the reward-to-risk ratio is more attractive.

In big tech, I’m especially watching Google, Meta, and Tesla—they are the most application-oriented, with the highest flexibility. Software stocks are currently being unfairly punished, with valuations extremely cheap. Truly AI-disrupted software companies are few; most can leverage AI to deepen services and expand users. This could be one of the earliest fertile grounds for AI application breakthroughs.

Overall, there are still many opportunities in the U.S. stock market. No need to rush into missing out, nor to worry too much about a correction. Looking at the bigger picture, this rally has only just begun.