I observe something that really deserves attention right now. The stock market rally is accelerating and approaching record highs, but two other critical markets tell a completely different story. And honestly, it's this disagreement that worries me.

In just ten trading days, the S&P 500 has completely erased the losses related to recent geopolitical tensions. Yesterday, it was 1% above the February 27 level and was close to its all-time highs. If you only look at the action, everything seems to be returning to normal. War breaks out, the market drops, then quickly rebounds, end of story.

But here’s the problem: bonds and crude oil are not confirming this rally. And when the two most important markets in the world tell you a different story, it’s not a signal to ignore.

On February 27, before the tensions, here’s where we stood: 10-year bond yields at 3.95%, WTI oil at $67.02, 2-year yield at 3.38%. Yesterday, 10-year yields rose to 4.25% (plus 30 basis points), oil climbed to around $92 (plus 37%), and the 2-year yield reached 3.75% (plus 40 basis points).

What the stock market is asking us to believe simultaneously is quite ambitious. It really requires current oil prices not to slow consumption significantly. It requires the Federal Reserve to ignore inflation signals and still cut rates. It requires corporate margins not to be eroded by higher costs. And it requires the conflict in the Middle East to be sufficiently resolved within the next six months.

Maybe. It’s not impossible. But these are bold assumptions, and frankly, the bond and oil data do not support them.

Look at the 2-year yield, it’s the most reliable thermometer for rate expectations. It remains 40 basis points above pre-war levels. This signal clearly indicates that the Fed’s room for maneuver is more limited than stock buyers imagine. And what about oil prices? If there were really an imminent resolution to the conflict, it should have already fallen back to around $70. But it remains high. The oil market does not incorporate this expectation of a quick resolution that stocks assume.

This market rally is largely driven by momentum rather than fundamentals. Traders avoid short-selling in an upward trend, which exerts continuous upward pressure. It’s true that this can prolong a rally longer than it should last. But it doesn’t change the underlying logic: oil remains expensive, yields continue to rise, and the rate decline margin that buyers require is more limited than reality allows.

Fundamentally driven increases are sustainable. Those driven by momentum? Much more fragile.

There is currently a marked gap between what the stock market values and the reality reflected by bonds and oil. This gap is not narrowing; it’s widening. Stocks are at the most optimistic end of their range. Bonds and oil are closer to the middle, reflecting a world where inflation persists, where the Fed has little room to maneuver, and where conflicts are not truly resolved.

This disagreement will inevitably be resolved. Two possible scenarios: either a genuine ceasefire, oil falls back to $70, the Fed gets clarity to cut rates, and the stock market rally proves justified. Or none of that happens, and stocks decline to align with what bonds and oil are already reflecting.

For now, bonds and oil do not seem to be leaning toward stocks. It’s the opposite that’s taking shape.

Inflation data comes out on May 12. If CPI exceeds 3.5%, the narrative of rate cuts in 2026 is essentially dead. At this point, if you keep adding positions, you’re betting everything unfolds in the most optimal way possible. Four things must happen simultaneously: the war ends unexpectedly, no unforeseen statement disrupts the market, inflation remains under control, and the Fed cuts rates as planned. Any of these elements derailing could trigger a rapid and violent market adjustment.

I prefer to exercise patience rather than silently pursue a rally contradicted by two major asset classes. If long-term signals confirm the buy, I will gradually increase positions according to my strategy. But for now, I remain cautious. The only certainty is that everything is changing.