The three major indexes hit new historical highs again, but the weak performance of the Dow Jones Transportation Index has raised concerns about a "bull market trap."

On Friday, the US stock market once again saw strong performance, with the Dow Jones Industrial Average, the S&P 500 Index, and the Nasdaq Composite Index all hitting historical highs, with market sentiment remaining high. Even the long lagging small-cap index Russell 2000 Index hit a near four-year high on Thursday, but saw a slight pullback on Friday. However, in this broad upward trend, the Dow Jones Transportation Average, an important index, showed weakness. As of now, the index has fallen nearly 2% this year, deviating significantly from the overall trend, signaling potential market risks. The Dow Jones Transportation Average consists of 20 leading transportation companies, including airline companies like Delta Air Lines, Inc. (DAL.US) and Southwest Airlines Co. (LUV.US), railroad operators Union Pacific (UNP.US) and CSX Corporation (CSX.US), trucking companies Old Dominion Freight Line (ODFL.US) and J.B. Hunt Carriage Services Inc. (JBHT.US), as well as delivery giants FedEx Corporation (FDX.US) and United Parcel Service (UPS.US). In February 2024, Uber Technologies, Inc. (UBER.US) replaced JetBlue Airways Corporation (JBLU.US) in the index, symbolizing its representation of new economic transportation models. According to Dow Theory, the Transportation Average and the Industrial Average should rise together to confirm that the market is in a healthy expansion phase. A deviation in the trend of the two is seen as a sign of weakening economic momentum or even a precursor to recession. Tom Essaye, author of The Sevens Report, warned in Friday's market brief that the continued weakness in the Transportation Average may mean that the current market rally is just a "bull trap." Adam Turnquist, Chief Technical Strategist at LPL Financial, pointed out in a research report that global growth slowdown and uncertainty from tariff policies are putting pressure on the transportation sector, and these macro risks could eventually spread to the broader market. The core issue currently lies in whether the weakness in the Transportation Average is just a temporary adjustment or a sign that the recent breakthrough in the Dow Jones Industrial Average is a "false breakout," indicating a lack of fundamental support for the market rally. In the transportation sector, FedEx Corporation is considered an industry "bellwether." The company's solid performance in its earnings report released after hours on Thursday led to a more than 2% increase in its stock price on Friday, seen as a positive signal by the market. Raphael Thuin, Capital Market Strategy Director at Tikehau Capital, stated that transportation stocks are most sensitive to changes in the economy, and if the market rotation continues, transportation stocks could become the main drivers of the next phase of the rally. However, the positive news for FedEx Corporation did not lead to a rebound in the entire sector. On Friday, the Transportation Average still saw a slight decline, with United Parcel Service falling by 1%. Analysts point out that unless more transportation companies report strong earnings and optimistic guidance, the current market rally may struggle to continue, possibly confirming whether this rally is just a "bull trap" by the end of the year.