On Thursday, the S&P 500 achieved an intraday high of over 7,800 and closed at an all-time high of 7,798.99, reflecting a strong bullish sentiment in the market. The energy sector has been a key driver, gaining nearly 6% this week, while healthcare and financials also showed positive movement, each rising more than 1%.
Despite this optimistic outlook, Bank of America's Michael Hartnett cautioned that the surging national debt, which is projected to exceed $40 trillion soon and potentially reach $50 trillion by 2029, alongside rising Treasury yields, could threaten the market's momentum.
The 30-year Treasury bond yield recently approached 5.24%, the highest in over a decade, raising concerns about future borrowing costs and economic stability. Hartnett emphasized that current asset allocation strategies favor equities over bonds and other assets, but persistent increases in yields and debt levels could challenge the stock market's resilience