Don't look at the SP500. Look at Treasuries and the USD

Chart 1: Treasuries yield rise across the board

                                                                                                

Chart 2: Normalised Principal Component Analysis loadings show Treasuries rise while USD falls 

Chart 3: 30 year yield minus 3 month, 1 year, 5 year and 10 year yields

Most retail investors invest in the Equities market. But in this increasingly inter-connected financial markets environment, its important to look at the Bond Market and the US Dollar to understand the situation in the Equities market. The rise in the SP500 is unsustainable if bond yields rise and is even more unsustainable if this is accompanied by a steadily falling USD. 

Rationale and explanation.

1. In turbulent times such as now, it's  a risk-off situation. In which case, the logical thing would be for money to flow to US Treasuries. But with the US budget deficit getting ever higher ($36 Trillion and counting) Treasuries are not a sure thing anymore. Yields are going higher which means Bond prices are dropping.

2. For foreigners: If the USD is on a secular downtrend, even if you  turn a profit in equities or bonds when you convert the USD to your country's currency you may still book a loss.

3. The USD is the lynchpin with which all  asset classes are connected because most of the world's trade is conducted in the USD. Especially Commodities. It's also the Reserve Currency for the world. But the strength of the USD and Treasuries is currently being eroded by the madcap policies and TACO trade of the MAGA Presidency. And once that trust in US Institutions and assets is gone, America will become what Britain once was. 

The global order is shifting to Asia riding on the coat tails of the economic giants of China and India.