The S&P 500 Just Did Something It’s Only Done 3 Times Before. Why Trump’s AI Rally Is in Danger
The S&P 500 Just Did Something It’s Only Done 3 Times Before. Why Trump’s AI Rally Is in Danger
Publish Date: 2026-05-10 14:03:00
Source Domain: 247wallst.com
The stock market keeps climbing walls investors barely seem to notice anymore. The S&P 500 just hit another all-time high, extending a rally that has added nearly 50% since the tariff-driven panic low in April 2025.
President Donald Trump’s tax cuts, deregulation push, and pro-business policies embedded in the One Big Beautiful Bill Act have helped fuel that surge. Corporate profits remain healthy, unemployment is low, and artificial intelligence spending continues pouring rocket fuel on Big Tech earnings.
But beneath the surface, something looks off. And history suggests smart investors should pay attention.
An Historic Warning Sign Just Flashed
On Friday, the S&P 500 reached a fresh record high while 5.6% of its components simultaneously hit new 52-week lows. Independent investment research firm Hedgeye Risk Management notes this has only happened three other times in history:
- July, 1929
- January, 1973
- December, 1999
That is not exactly comforting company. Those dates came shortly before three of the worst bear markets investors have ever endured. The 1929 peak preceded the Great Depression crash. The 1973 signal arrived before the brutal stagflation-era collapse and the onset of the so-called “Lost Decade.” December 1999 marked the final euphoric stage of the dot-com bubble.
Granted, history does not repeat perfectly. Markets are driven by different economic conditions, different Federal Reserve policies, and different technologies every cycle. But market breadth deterioration this severe while indexes make new highs is rare for a reason. The market’s headline numbers may be hiding weakness underneath.
The Trump Bull Market Is Narrower Than It Looks
President Trump’s economic agenda has unquestionably helped ignite investor optimism. The extension of corporate tax cuts, accelerated depreciation rules, and regulatory reforms through the OBBBA boosted expectations for earnings growth across multiple sectors.
According to Treasury Department…
