Lately, I've been paying close attention to the changes in the U.S. stock market trend, and some things might be overlooked by many.

On Friday, the NASDAQ and S&P 500 hit new all-time highs again, rising for the sixth consecutive week. On the surface, it looks impressive; the AI chip rally was indeed hot, with giants like Micron, Intel, and AMD all rising over 10%. Plus, the U.S. April non-farm employment data far exceeded expectations, igniting market sentiment.

But there's a question worth pondering. Although the rally seems strong, it is actually becoming more and more concentrated. The market is rising, but breadth continues to deteriorate, with only a few tech giants supporting the rally. Once the style shifts, momentum strategies could suffer heavy losses.

Looking at the U.S.-Iran situation, both sides are in a "fight but not breaking" balance, providing a fundamental support for U.S. stocks. However, IMF's warning is worth noting—if the Middle East conflict drags on, oil prices could surge to $125, global inflation might spike to 5.4%, and the world economy growth rate could slow to 2.5%. This is no small matter.

Most critically, as oil prices stay high, U.S. military spending increases, and inflation pressures rise, the proportion of U.S. debt to GDP will continue to climb. Foreign investors are starting to reduce their reliance on U.S. Treasuries, and this trend is already evident.

Regarding the future of the U.S. stock market, the 10-year Treasury yield is a key indicator. It is currently around 4.36%, which is near the long-term downtrend line, and the direction could be triggered at any moment. If it further rises to around 4.6%, caution is needed for potential profit-taking by bulls.

From a technical perspective, the S&P 500's RSI has entered overbought territory, indicating a short-term correction or pullback may be needed. Focus on resistance near 7,450 points. If it can stabilize above 7,300, a rebound toward 7,560 is possible. But if it effectively breaks below 7,300, watch out for a decline testing 7,200 or even 7,000.

In summary, the U.S. stock market looks glamorous on the surface, but its internal structure is deteriorating, and external risks are accumulating. With valuations high, how long this AI frenzy can last remains uncertain.