No fight. The S&P 500 managed to hit new record highs because market professionals — the so-called "smart money" — see no need to go against the prevailing momentum. Put differently, there is no point in opposing the crowd. When the US economy is strong, inflation is slowing, and corporate earnings prospects are improving, selling stocks is simply too costly. However, the moment to reassess will inevitably come. And quite possibly, it could happen as early as this summer.

Goldman Sachs believes that increased liquidity flows, fading fears of a US recession, and a seasonally strong period for the S&P 500 will allow the broad equity index to continue rallying over the next several weeks. In June, it last closed in the red as far back as 2014. The average performance since 1928 is +1.67%. However, in the bank's view, the American equity rally will likely lose its upward momentum in August.

S&P 500 seasonal dynamics

The foundation of the S&P 500's 25% upward move lies in investors' growing habituation to the antics of the US president, the still-resilient domestic economy, and expectations of monetary policy easing by the Federal Reserve. At the central bankers' meeting in Sintra, Portugal, Jerome Powell noted that if not for tariffs, the federal funds rate would not be so high. They create uncertainty and force the Fed to be cautious. Still, the resumption of a monetary expansion cycle could occur at any upcoming FOMC meeting. Just a few days ago, in testimony before Congress, the Fed chair made it clear that borrowing costs were unlikely to be cut before September. The Fed's flexibility was welcomed by equity markets.

As was the Senate's approval of Donald Trump's "big and beautiful" tax cut bill. It is estimated to be worth $3.3 trillion. Of that, $4.5 trillion is allocated for fiscal stimulus, and $1.2 trillion comes from spending cuts. If the plan is passed by the House of Representatives, Elon Musk is ready to start forming a new party, the American Party. His renewed conflict with the president has intensified and led Tesla shares to a sharp decline. This development has slowed the S&P 500's advance and prevented the broad index from setting fresh records even against the backdrop of improving corporate earnings prospects.

Earnings forecast dynamics for S&P 500 companies

The "smart money" seemingly is not resisting the equity market's upward momentum, but is actually selling the S&P 500 when it is strong. Bank of America clients have been pulling funds out of US equities at the fastest pace in the past 10 weeks. The total outflow amounted to $1.3 billion.

Technically, on the daily S&P 500 chart, there is an intense battle unfolding around the pivot level of 6,200. If bulls win and the broad equity index consolidates above this threshold, it will open the door to expanding long positions opened from 6,051. Conversely, a victory for bears would become a trigger for selling.