Stocks Rally To Records But Analysts Warn Gains May Be Overextended And A Pullback Could Be Near

Benzinga

U.S. stocks extended their rally as the Dow hit a record high and posted its best quarter in a year. Optimism over earnings, tax cuts, and rate cuts drove gains, while bond yields fell and credit spreads tightened. Analysts warn speculation in meme stocks, AI, and SPACs could make markets vulnerable to a correction if inflation rebounds.

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00:00It's Benzinga, bringing Wall Street to Main Street.

00:02Stocks extended their rally Tuesday as the Dow Jones Industrial Average closed on a record high,

00:06getting 0.2% and posting its best quarter in a year with a 5.2% advance, according to the Wall Street Journal.

00:12Earnings strength, tax cut prospects, and interest rate cuts are fueling optimism.

00:17The LASP 500 has climbed 14% this year, and the Dow and NASDAQ have posted up 9.1% and 17% respectively.

00:23The bond market rallied on rate cut homes, struggling the 10-year Treasury yield down to 4.149%,

00:29pushing corporate credit spreads to their lowest level in decades.

00:32And concerns are mounting that the rally has overextended.

00:35The analysts warning about fraudly speculation in meme stocks, a SPAC revival,

00:39soaring AI valuations, and stretched corporate multiples.

00:43Gold and silver prices are also surging at some investors' hedge against risks.

00:47Analysts warn that any inflation rebound from tariffs can trigger a 5% to 10% correction.

00:51For all things money, visit Benzinga.com.

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