US stock indices closed higher yesterday, with the S&P 500 rising by 0.62%, the Nasdaq 100 increasing by 0.72%, and the Dow Jones Industrial Average (0.65%).
The VIX volatility index declined to 20 points yesterday, marking its lowest level since February 27, 2026, reflecting investor optimism and increased appetite for US equities.
Despite this strong optimism, US equity markets face several risks during the current period.
First, geopolitical tensions. Although the United States and Iran agreed earlier this week to a two-week ceasefire mediated by Pakistan, with reports of direct negotiations between the two sides taking place today in Pakistan, this truce remains fragile. The Strait of Hormuz is still largely closed, and the conflict in the Middle East continues. As a result, concerns remain about a potential escalation of the conflict amid uncertainty regarding the durability and respect of the agreement, which could pressure risk assets, particularly equities.
Second, inflation concerns. The Core Personal Consumption Expenditures (PCE) Price Index for March recorded annual growth of 3.0%, in line with expectations but still well above the Federal Reserve’s 2% target. This came alongside the release of the Federal Reserve meeting minutes on Wednesday, which revealed that some policymakers favored a dual-approach framework for guiding future interest rate decisions, indicating that further tightening could be justified if inflation remains above target levels.
Third, fiscal concerns. Increased military spending in the United States could place additional pressure on public finances, which are already facing a significant fiscal deficit, potentially leading to a further widening of that deficit. Indeed, US Treasury yields rose broadly across maturities, particularly the 30-year Treasury yield, which is the most sensitive to fiscal policy developments.
Notably, the Philadelphia Semiconductor Index reached a new record high yesterday, rising by approximately 23% since the beginning of the year, reflecting strong optimism toward investment in the semiconductor and artificial intelligence sectors.
From a technical perspective, the Nasdaq 100 reached 25,097 points, its highest level since March 11, 2026, before closing at 25,082 points. The Relative Strength Index currently stands at 60 points, indicating positive momentum for the index. In addition, a bullish crossover has appeared between the MACD line and the signal line, which strengthens the probability of continued positive momentum. However, a bearish crossover remains in place between the 20-day and 50-day moving averages, which may signal some downside risks.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
