After an eventful two-month stretch for the stock market that featured one of the biggest momentum crashes in recent memory, investors who managed to sit tight through it all are being rewarded once again.
The S&P 500 tallied a fresh record closing high on Tuesday — its 25th of 2026 and its first since June 2, according to Dow Jones Market Data. That 42-day gap was the longest stretch between record finishes since a 53-day stint that ended April 16; on that day, the index completed what was, by one measure,its fastest V-shaped rebound in history.
At this point, investors have grown accustomed to brief bouts of volatility — spurred by tariffs, the war with Iran or creeping worries about the payoff on artificial-intelligence-related investments. And even at its nadir, the drawdown at the index level was never all that severe: At its intraday low on June 9, the S&P 500 was down just 4.9% from its record high.
But that figure masks the true extent of the pain beneath the surface, as highflying semiconductor names, power stocks and industrials — anything seen to be benefiting from the AI buildout — came crashing back to earth. Measures of correlation within the S&P 500 fell to their lowest levels in years as individual stocks tallied big swings, often moving in different directions from the broader market.
Fortunately, several key data points suggest the market might finally be turning a corner. Late last month, Situational Awareness, the hedge fund run by 20-something AI wunderkind Leopold Aschenbrenner, was forced to sell most of its public-equity positions to Ken Griffin’s Citadel in a block trade as it scrambled to meet margin calls. Since then, the market has flashed several bullish signals, while some sentiment gauges have shown signs of improvement.
During the two trading session through Monday, the Roundhill Magnificent Seven exchange-traded fund outperformed the S&P 500 by about 5 percentage points — its largest two-day outperformance on record. Weakness in the all-important megacap tech names had been a major factor holding indexes like the S&P 500 and Nasdaq Composite back over the past two months.
Correlation has started to improve as well. This was evident Tuesday as members of the “Magnificent Seven” rallied alongside software and semiconductor names, decisively breaking a recent pattern that had seen semiconductors on one side of the trade and software and the megacaps on the other.
“As they say, bull markets climb a wall of worry, and we certainly had a lot of worry over the last few weeks,” Michael Monaghan, portfolio manager at Founders 100 ETF, told MarketWatch during an interview. “But the forced selloff of the Situational Awareness names seemed to put a bottom in the market, and I think we’re seeing all of the data points lining up for strength.”
On Tuesday, the S&P 500 flashed a vigorous breakout from a technical pattern known as a “flag” or a “wedge” — typically a bullish signal, according to Adam Turnquist, chief technical strategist at LPL Financial.
“We broke above 7,600 — that’s all that matters. That was the high end of the range,” Turnquist said.
FactSet, MarketWatch
Another encouraging sign: The S&P 500 isn’t moving higher in isolation. The Dow Jones Industrial Average and the small-cap Russell 2000 also finished in record territory on Tuesday. So did the iShares MSCI ACWI ETF, which tracks an index of global stocks.
“We’re seeing breakouts across the global equity-market complex at this point — just another sign of the broad-based participation we are seeing,” said Bill Northey, senior investment director at U.S. Bank.
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