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Six Weeks Up. Is Anyone Worried?

Markets hit record after record as missiles fly, Burry warns of a bubble, and consumer sentiment hits a new low.

Author

George Babis
May 10, 2026

👋 ICYMI

The S&P 500 closed at a new all-time high of 7,399 and the Nasdaq surged to 26,247 — both posting their sixth consecutive weekly gain, the longest winning streak for each since 2024. The Nasdaq jumped 4.5% on the week and the S&P 500 gained 2.3%, while the Dow lagged with a 0.2% rise.

The week began violently. On Monday, Iran launched missiles and drones at the UAE — the first time the UAE activated its missile defences since the ceasefire began — and Iran fired on U.S. warships transiting the Strait of Hormuz. The U.S. military sank six Iranian boats in retaliation. Oil surged to $114 on Brent and $107 on WTI. Israel, Bahrain, and other Middle Eastern allies went on high alert. President Trump warned that Iran would be "blown off the face of the earth" if it targeted U.S. vessels.

The Dow fell 557 points on Monday — its worst day in more than a month. But by Tuesday the market had fully recovered, and by Friday the Nasdaq was up 4.5% for the week as if the missiles never happened. Danish shipping giant Maersk reported that one of its ships successfully transited the Strait under U.S. military escort — a small but symbolically important milestone.

And then there was Michael Burry — of "Big Short" fame — warning that the market's AI fixation resembles the final stages of the dot-com bubble. "Stocks are not up or down because of jobs or consumer sentiment," Burry wrote. "They are going straight up because they have been going straight up."

🔁 Market Movers

👀 Signals I'm Watching

  • 📈 Record Profit Margins Are Carrying the Market

    The S&P 500's blended net profit margin stands at 14.7% — the highest since FactSet began tracking in 2009. With 63% of S&P 500 companies having reported, 83% beat earnings estimates and 78% topped revenue forecasts. This is not a market held up by hope alone — actual corporate profitability is at a generational peak. The question is whether it's sustainable with inflation at 3.5% and oil still above $95.

  • 🤖 "Sell the News" Is the New Pattern for AI Stocks

    Palantir beat on every metric and dropped 5%. Alphabet surged on earnings but has been struggling to push higher since. The Goldman Sachs $GS ( ▲ 1.15% ) finding that the median stock beating EPS estimates is outperforming the S&P by only 20 basis points — one of the smallest reactions on record — tells you that expectations have been front-loaded. Strong results aren't enough anymore. The market wants blowout plus cheap.

  • 🐻 Burry's Bubble Warning Deserves a Listen — Not Panic

    Michael Burry's dot-com comparison is worth taking seriously, not because he's always right — he often isn't — but because the observation is structurally valid. The S&P 500 has gained roughly 12% from its March low while consumer sentiment hit record lows and PCE inflation hit 3.5%. The gap between market euphoria and consumer reality is historically wide. That gap can persist for months, but it doesn't persist forever.

  • 🕊 The Market Has Priced In Peace — Again

    For the second time in two months, the market has rallied to record highs on the expectation that the Iran conflict is winding down. The first time, the ceasefire frayed within days. This time, Iran literally attacked the UAE and fired on U.S. warships — and the S&P 500 finished the week at an all-time high. Either the market is correct that this conflict is approaching resolution, or it's dangerously complacent. Nvidia earnings on May 20 and the ceasefire's trajectory will test both theses.

$OSS ( ▲ 3.84% ) performance since my bullish write-up in late April

In late April, I published a deep dive on a small and largely unknown company in a niche AI infrastructure space. Shares have nearly doubled since then and $OSS has quickly become my biggest holding.

If you want to follow along in real time — full research, portfolio holdings, and transaction updates — you're welcome to join our Investment Club here.

— George

⚠️ Red Flag to Note

Consumer Sentiment and Market Sentiment Have Never Been This Far Apart

Consumer sentiment at 48.2 — an all-time low — while the S&P 500 trades at an all-time high. PCE inflation at 3.5% while corporate profit margins hit a 17-year record. Gas above $4.22 while the Nasdaq is up 4.5% in a single week. These are not contradictions the market can ignore indefinitely. Historically, when consumer sentiment diverges this dramatically from equity valuations, one of two things happens: either the consumer catches up (via falling prices or rising wages) or the market catches down. The March PCE reading — with headline inflation accelerating from 2.8% to 3.5% in a single month — suggests the consumer is not about to catch up.

🔍 Insider Transactions I’m Watching

Ticker

Insider

Action

Value

Why It Matters

$PS ( ▲ 15.8% )  

Bill Ackman — CEO & Chairman

Buy

~$15.7M

The activist investor purchased 659,540 shares of Pershing Square Inc. at roughly $24 on April 30. This is Ackman's third open-market purchase in six months, totalling roughly $19M. A CEO tripling down on his own listed investment vehicle signals strong conviction in the underlying portfolio.

$ALKT ( ▲ 3.1% )

General Atlantic — 10%+ Owner

Buy

~$14M

The growth equity firm purchased 844,772 shares of Alkami Technology, a cloud banking platform, on May 6. General Atlantic has now accumulated $94.4M in Alkami over the past six months across 7 purchases — a massive institutional bet on fintech infrastructure serving regional banks.

$EXE ( ▼ 1.52% )  

Marcel Teunissen — CFO

Buy

~$193K

The Expand Energy CFO purchased 2,000 shares at roughly $96 on May 7. CFO-level buying in a natural gas producer during elevated energy prices is a direct bet that energy strength persists — particularly notable as the Iran conflict continues to disrupt global supply.

📬 Closing Note

Six straight weeks of gains. New all-time highs for the S&P 500 and Nasdaq. A 12% rally from the March lows. Record corporate profit margins. And a market that absorbed Iranian missiles hitting the UAE without missing a beat.

By almost every measure, this is one of the strongest stretches for U.S. equities in recent years.

And yet — consumer sentiment just hit the lowest level ever recorded. Inflation is accelerating. Gas is above $4.22. The Strait of Hormuz is still contested. And one of the most famous short sellers in history just compared this market to the final stages of the dot-com bubble.

Both of these realities can be true at the same time. Corporate America is genuinely earning more money than it ever has. The AI buildout is real and broadening. But consumers are hurting, the Fed can't cut, and the market is pricing in a level of confidence about the future that the present doesn't fully support.

The best investors I know don't try to resolve these contradictions — they manage them. They hold their highest-conviction positions through volatility, stay diversified across themes, and remain honest about what they don't know.

Nvidia reports May 20. That's the next major catalyst. Between now and then, the ceasefire's trajectory and oil's direction will determine whether this rally extends or pauses.

Until next Sunday —