US stocks are climbing as geopolitical risks wane, with the S&P 500 surging to 6,101, nearly erasing its April losses and edging closer to all-time highs. The rally follows a Middle East truce that has steadied oil markets, easing concerns over a potential crude price shock, Bloomberg reported.
According to Emmanuel Cau of Barclays, investors are overreacting to short-term market swings. Such moments actually present buying opportunities rather than reasons to sell. Moreover, the market still has upside potential as many major players haven't yet allocated all their available capital, according to Bloomberg.
Trend-following investors who have already built substantial positions are unlikely to initiate large-scale selling as long as market stability holds. However, market support could weaken as US companies enter their buyback blackout period ahead of the second-quarter earnings season. Meanwhile, the expiration of $6.5 trillion in options contracts has reduced hedging pressure, allowing for more organic price action, said Tier 1 Alpha strategists.