Stocks have been rising for two straight months! Wall Street is not buying into this "reluctant bull market" in the US.

Despite the continuous breaking of historical records in the US stock market, Wall Street analysts covering these stocks are not in a rush to chase after this uptrend. Observations show that analysts who almost always predict stock prices to rise are currently downgrading the expectations for S&P 500 index component stocks at a faster pace than upgrading them - the second time this has happened since the outbreak of the Iran war. Data from Jefferies LLC also shows that in the broader coverage of the Russell 3000 index, the proportion of component stocks rated "buy" is almost the same as four years ago and far below the peak during the dot-com bubble. Regardless of the exact reasons behind this new sense of doubt, the market generally views it as a healthy development. From a contrarian investment perspective, this means that market sentiment has not yet reached the extreme levels typically seen at the top of the market. Andrew Greenebaum, Senior Vice President of Equity Research Product Management at Jefferies, said, "I tend to look at market sentiment from the perspective of 'are there more incremental buyers or sellers.' Sellers (analysts) have not shown signs of capitulation (yielding to the bullish market) - at least not yet." Sensible prevailing: despite the stock market rebound, there are still more downgrades than upgrades for S&P 500 component stocks According to LPL Financial data, since mid-April, the S&P 500 index has continuously hit new highs due to expectations of a peaceful resolution to the Iran situation and enthusiasm surrounding the profit potential of artificial intelligence (AI) technology. The index has risen for nine consecutive weeks, with a gain of 20% during this period, setting a record for the strongest continuous rise in 75 years. Although overbought conditions have sent warning signals and participation in this rally remains narrow, there are almost no signs of complete frenzy. According to Jefferies' data, the proportion of component stocks in the Russell 3000 index rated "buy" is currently maintained at 82%, slightly above the long-term average level but still below the peak of 90% at the turn of the century. At Bank of America Corp., a reverse indicator that tracks the recommendation of stock allocation proportions has risen in the past month but still remains in the "neutral range." In their June 1 report to clients, Bank of America strategists Victoria Roloff and Savita Subramanian wrote that the indicator is still below levels seen at previous market peaks, implying a "healthy 12% price return for the S&P 500 index in the next 12 months." In addition, the latest survey by the American Association of Individual Investors (AAII) shows that the number of bears continues to exceed the number of bulls. "One of the most grudging rebounds in a long time" For Greenebaum, the current situation has created "one of the most reluctant rebounds in a long time." Of course, a lack of frenzy does not guarantee that the uptrend will continue, especially as other warning signals continue to increase. By historical standards, the overall valuation of US stocks remains high, and the concentration of technology stocks has reached extreme levels - at the same time, negotiations between the US and Iran on reopening the Strait of Hormuz are at a standstill. According to the semi-official Iranian Student News Agency (ISNA), Iran stated on Monday that it would suspend "mediated talks and document exchanges" in protest of Israeli attacks in Lebanon and warned of potential attacks on northern Israel if the attacks continue. Furthermore, moderate survey data may not always reflect the full picture, especially in an increasingly differentiated market - where the artificial intelligence boom is quickly creating winners and losers. Dan Suzuki, Global Investment Strategist at iCapital, pointed out that while Wall Street strategists and analysts may remain cautious, other indicators show that risk appetite is increasing. In addition to survey data, the actual stock allocation of US households is at record levels. He said that retail investors have recently increased purchases of leveraged stock-linked products, and the stock exposure index tracked by AAII is currently at 69.8%, close to the highest level since 2000. Suzuki said, "Currently, the market bull is mainly dominated by AI bulls, as this sector has the best profit momentum. Apart from this trade, bullish sentiment is clearly more sporadic (unevenly distributed)."