Does President Trump’s Bull Market Start Up Again on Wednesday?

The key setup is not just momentum; it is the interaction between passive flows, under-owned risk assets, and a market that has not yet been forced to pay for duration or cyclicality. A sustained equity grind higher tends to enrich the narrow group of “quality growth” leaders first, then leak into beta as systematic strategies chase realized volatility lower. That dynamic is still supportive for AI-linked capex beneficiaries and high-duration software, but it also creates a hidden vulnerability: once breadth stalls, the same crowded winners can gap lower together because portfolio hedges are already light.

Second-order, the market’s current resilience is a tax on defensives and cash-proxy exposures. If investors believe the soft-landing narrative for another 1-2 quarters, utilities, staples, and short-duration bond substitutes remain structurally disadvantaged versus earnings leverage and AI spend plays. But if rates back up even modestly or the next macro print surprises on inflation, the biggest losers are not the index itself; it is the most crowded long-duration names that have been financed by expectations of falling real yields.

The contrarian read is that a nine-week advance can be less a sign of improving fundamentals than a sign that positioning has become too complacent to absorb bad news. When sentiment is already constructive, upside often continues until a single catalyst forces de-risking—typically a weak labor print, an inflation re-acceleration, or a disappointing megacap earnings guide. That means the risk is asymmetrically higher over days-to-weeks than over months, because a clean trend can survive mediocre data, but a sharp macro surprise can unwind systematic exposure quickly.

I would treat this as a momentum market with a late-cycle fragility premium: still bullish until breadth or rates break, but not a place to chase unhedged exposure after an extended run. The most attractive expression is to own the winners with defined downside and fade low-quality laggards that need a perfect macro backdrop. In other words, stay long the trend, but pay for insurance before the market learns whether the rally is being driven by earnings improvement or just mechanical positioning.