Stocks close at new records

The tape is telling you that lower geopolitical risk is acting less like a one-day relief rally and more like a volatility suppressant across cyclicals and growth. That matters because when headline risk fades, investors stop paying up for “duration hedges” and start rewarding companies with cleaner near-term cash conversion: the winners today are not just the names with strong prints, but the names whose business models look less hostage to macro shocks over the next 1-2 quarters.

The drone and defense-adjacent move is the most interesting second-order trade. If Washington starts backstopping the domestic drone stack, the immediate beneficiaries are the assemblers and integrators, but the more durable upside may accrue to component suppliers, avionics, software, and battery/charging ecosystems that will see procurement pull-forward without having to compete directly for primes. That also raises the probability of a mini-capex cycle in small defense tech, where public-market multiples can re-rate faster than contract revenue actually lands.

Healthcare strength looks more like reimbursement elasticity than a pure growth story: if payor coverage broadens further, GLP-1 utilization should shift from an access-constrained market to a capacity-constrained one, which helps scale leaders and pressures smaller obesity-play names that lack distribution leverage. On the other side, the biggest near-term risk is that the current risk-on bid is being financed by fragile flows; if crypto weakness persists and ETF outflows continue, high-beta growth could lose an important marginal source of liquidity even while equities look complacent.

The semis/software reactions suggest investors are rewarding guide-raising and penalizing any sign of conservative forward commentary, but that divergence is likely to widen only if enterprise spend holds through the next two earnings windows. In other words, the market is rotating from “beat-and-hold” to “beat-and-accelerate,” which is favorable for quality compounders and dangerous for names whose valuation still assumes linear re-acceleration.