How long can the U.S. stock market keep going crazy? The truly dangerous point might be in 2027!

Today at noon, U.S. stocks and cryptocurrencies dropped significantly, with U.S. stock futures plunging about 0.8%, and Bitcoin falling from 74,000 to 72,600.

The main reason was still influenced by a piece of news: Iran launched an attack on U.S. military airbases. This news was released at 11:15, and both U.S. stocks and Bitcoin started to decline from that point. Currently, crude oil has also returned to $92.

All I can say is that the current news environment has a very significant short-term impact on the market, so short-term trading is indeed very challenging.

Let me share my view: first, the U.S.-Iran war is unpredictable. They sometimes fight, sometimes negotiate, so short-term judgment is difficult. It has already lasted three months, and the impact of high oil prices will definitely have some effect, because the price has not exceeded the absurd level of $120. It’s currently maintained around $80-100, which is about 20% higher than normal (around $60-70). If this situation continues, I estimate the impact might be seen by the end of the year (in half a year).

Because if corporate costs increase by 20% in the short term (like three months), then spread over a year, the annual cost increase would be about 5%. Some companies might rely on cash flow to withstand this, but the longer it lasts, the more these costs will accumulate. For example, over a year, costs could realistically increase by 20%!

The longer high oil prices persist, the more detrimental it is to the global economy. This can be seen as a snowball effect, growing larger over time with inertia.

Currently, U.S. stocks are still reaching new highs, and given their large market size, it’s unlikely they will fall immediately. This high-speed train also has inertia. Although there haven’t been any major positive news in June and July, I estimate the market will mostly consolidate or drift sideways here, or slowly rise, because the semiconductor sector in the U.S. is still very hot. As I mentioned before, many semiconductor companies, like Micron, which has increased sevenfold in a year, and SanDisk, which has increased fortyfold in a year, are still performing well. Moreover, the AI narrative’s hype won’t end so quickly; it also has inertia. So I expect Q2 earnings reports in July for these AI-related sectors will still look good, and there won’t be an immediate downturn.

Based on the “inertia principle” I mentioned, this wave of U.S. stocks might continue into July and August. A 4-5 month rally is normal (some even 7-8 months), before a more noticeable decline occurs. You can look at historical NASDAQ chart data to see this conclusion—it's rare for the market to rise for just one month and then immediately fall. Since the rally started at the end of March, only two months have passed, so a quick correction isn’t likely based on timing.

Looking ahead, many factors will come into play, such as whether the conflict ends, whether inflation is controlled. As long as inflation doesn’t spike excessively, it’s still favorable for rate cuts later. Currently, most expect the Federal Reserve to cut rates early next year, giving the U.S. stock market a breather. Also, regarding semiconductor earnings, the recent surge in U.S. stocks has basically priced in all the positive outlooks. Future earnings must not be poor; if they are, the market could collapse. If U.S. stocks continue to rise like this into early 2027, even with rate cuts, I think we’ll be entering the “AI bubble moment,” and then the scary stories about AI might really begin.

So my overall view is quite simple:

In the short term, U.S. stocks are likely still relatively strong, at least more like a “sideways slow bull market,” rather than immediately entering a big bear market.

But in the long term, around 2027, U.S. stocks will definitely need a significant correction. Otherwise, this AI bubble will keep growing, and it might not be something a “small correction” can fix.

Because often: the later the market adjusts, the more severe the fall afterward.

Meanwhile, Bitcoin has not been closely following U.S. stocks and has performed quite weakly. ETF outflows continue, mainly because semiconductors are too hot. Money and attention are all going into semiconductors. Think about it: Micron can rise 20% in a day, while Bitcoin fluctuates 1-2% daily. Naturally, investors are chasing semiconductors.

If short-term optimism remains for U.S. stocks, Bitcoin shouldn’t be too bearish, even though it has already corrected quite a bit relative to stocks. In the long run, Bitcoin’s issues are not major; of course, we should watch out for the AI bubble, which probably won’t burst until 2026.