Markets and Economy Bears beware: Case for bull market momentum

I feel bad for the bears. Not the Chicago Bears, who may one day be in Indiana if stadium negotiations keep heading across state lines.

I mean the market bears.

One by one, I believe this market has knocked down their concerns.

Concern: No demand for AI

The argument was that artificial intelligence (AI) was little more than a science project searching for a business model. Fast forward to today and the debate has shifted dramatically. Demand has surged to the point where, in many cases, the bigger challenge is no longer finding customers. It's securing enough chips, power, memory, data center capacity, and electrical infrastructure to satisfy them.

Concern: High valuations

Many investors argued that stocks were simply too expensive. Yet earnings and earnings expectations have grown so rapidly that valuations appeared less stretched, even as the market has marched higher.¹ The market is now in its fourth consecutive year of strong gains, something many thought was impossible.²

Concern: Concentration risk

A handful of megacap technology companies were carrying much of the market’s gains, which was supposedly unsustainable.³ This year, however, equal-weight indexes have outperformed their market cap-weighted counterparts.⁴ Market participation has broadened considerably, with nearly two-thirds of stocks trading above their 200-day moving averages.⁵ That’s not a sign of a market standing on a narrow foundation in my view. It’s evidence of healthier breadth.

Concern: Circular financing

Critics argued that AI spending resembled companies using their own products and financing arrangements to create a self-reinforcing cycle of demand. Nvidia's recent announcement involving major financial institutions meaningfully challenges that narrative.⁶ Increasingly, external capital providers are stepping in to fund AI infrastructure investments rather than relying on Nvidia itself. That moves the ecosystem closer to a traditional capital spending cycle supported by independent financing and away from concerns that spending is simply being recycled within the same group of companies.

Concerns: Geopolitics, oil, and inflation

Certainly, the headlines were alarming. Yet despite periods of volatility, oil prices today have been where they stood in mid-April.⁷ Inflation expectations embedded in the bond market have fallen meaningfully.⁸ This week delivered additional encouraging news with favorable consumer and producer inflation reports.⁹ Once again, the feared outcome hasn’t materialized.

So where do the bears go next? And I don't mean Indiana.

Potential concern: Earnings bubble

Up next, I assume, is the concern of an earnings bubble. The argument is that hyperscalers are investing so aggressively in AI infrastructure that they’re borrowing future demand. In this view, today's spending has simply been pulling years of earnings forward for semiconductor, memory, networking, power, and industrial companies. But that perspective may miss the bigger picture. Consider that it’s currently estimated that roughly 250,000 people worldwide are actively training AI agents to work for them around the clock.¹⁰ Sounds impressive until you remember there are roughly 8 billion people on the planet. Now imagine a world where not hundreds of thousands, but hundreds of millions, are deploying agents to perform persistent work on their behalf.

If that future unfolds, today's investment boom may not look excessive in hindsight. It may look early. In fact, I’m going to go out on a limb and suggest that we could spend years in a near-perpetual state of compute constraints, where demand continuously pressures available supply despite massive investment throughout the ecosystem.

Which brings me back to the bears.

S&P 500 advance

The S&P 500 gained 26.26% in 2023, 25.00% in 2024, 17.86% in 2025, and is up 13.95% year to date in 2026.¹¹ At some point, fighting every advance can begin to look less like discipline and more like stubbornness to me. The market bears should have gone into hibernation a while ago, in my view.

As for Chicago, I feel bad about them potentially losing the Bears. At least they still have the Bulls. I'm happy to remain one of those, at least in the market sense. But don't expect me to forgive Michael Jordan and company for spending much of the 1990s crushing the championship dreams of my New York Knicks. Some scars never fully heal, even if the Knicks finally won a championship.