SPX daily
SPX daily

The S&P 500 rose 41 points to a record 5137 on Friday but it has given some back in the pre-market. Futures are down 6 points with Nasdaq futures similarly down 0.1%.

“The recent rally has driven the share of market cap in stocks with extremely high valuations to levels similar to those reached during the euphoria of 2021,” wrote Goldman Sachs equity strategists. “But the prevalence of extreme valuations today looks far less widespread than in 2021 after adjusting for market concentration.”

The S&P 500 has risen 25% since late-October as the market enthusiastically embraces AI. In addition, a Fed put is in play. If the economy stay strong, then the market can cheer on a strong economy. If the economy softens, the Fed will cut rates. On Friday a trio of soft economic data releases -- ISM manufacturing, construction spending and UMich consumer sentiment -- led to a rate-cut inspired rally.

This week the stakes are higher with ISM services data, Friday's non-farm payrolls report and two days of Powell testimony.

Here's a chart from Goldman that suggests a FOMO rally could kick off at any time.