The S&P 500 is riding a historic 329-session streak of upward momentum, but major Wall Street institutions are warning that this prolonged resilience could be threatened by rising leverage and looming stagflation.
A ‘Teflon’ Market Streak
The 200-day moving average of the S&P 500 has now risen for 329 consecutive trading sessions, marking the fourth-strongest streak over the last decade, according to market data from The Kobeissi Letter.
This follows a previous 460-session run, which ended in April 2025 following President Donald Trump‘s “Liberation Day” tariffs, bringing the combined upward trend to roughly 800 sessions—the third-longest stretch since 1990. Historically, the S&P 500 has returned an average of 8.5% per year when its 200-day moving average is rising.
This technical strength aligns with a broader market immunity to bad news. According to a recent CNBC report, HSBC strategists have described current financial markets as “Teflon” due to their ability to shrug off a barrage of recent shocks, ranging from surging inflation to geopolitical conflicts.
“It seems as if risk assets continue to ignore every negative catalyst,” HSBC strategists wrote in a note cited by CNBC.
Stagflation Could Impact the Momentum
Despite the ongoing bull market, analysts caution that the foundation of this rally may be vulnerable. Deutsche Bank recently questioned the endurance of the market’s resilience in the face of mounting inflation pressures and rising real rates.
“The current equilibrium is unsustainable … Risk assets like equities and credit are still strikingly complacent against the stagflationary shock that’s increasingly being priced into rates markets,” Deutsche Bank stated as per CNBC.
Leverage Risks Loom
Furthermore, HSBC highlighted several underlying vulnerabilities that could eventually break the market’s winning streak. A renewed rise in private-sector leverage could leave the economy and financial markets highly susceptible to sudden shocks, even though current debt levels remain at multi-decade lows.
Additional risks include higher corporate taxes squeezing profitability and a potential shift in the correlation between stocks and bonds.
While strong corporate earnings, robust wealth effects, and perceived central-bank backstops have shielded equities thus far, experts warn that any withdrawal of this support could severely test the market’s historic momentum.
How Have Stock Markets Performed in 2026?
The S&P 500 index has advanced 12.54% year-to-date. Similarly, the Nasdaq Composite index was up 14.08%, and the Dow Jones gained 10.40% YTD.
On Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq-100, respectively, closed mixed. The SPY was down 0.39% to $770.19, while the QQQ advanced by 0.18% to $718.96. Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), also ended 0.53% lower at $534.08.
In premarket trading on Tuesday, SPY was down 0.32%, QQQ rose 0.0070%, and DIA fell 0.77%.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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