To The Moon

The question of whether the recent market activity signals a tech-driven bull run or a broader market rally is a crucial one for investors.

The CPI print coming in line with expectations is supportive because it reduces immediate fears of sticky inflation, keeps rate-cut expectations intact, and sustains risk appetite. That’s why you’re seeing the Nasdaq push to new highs: mega-cap tech and AI leaders remain the clear beneficiaries of both earnings momentum and investor flows.

Whether this turns into a tech-only bull run or a broad bull market depends on two factors:

Earnings breadth – If only tech and AI deliver, leadership stays narrow, which can lift the Nasdaq but risks leaving the S&P 500 broader index less robust.

Macro signals – Softer inflation plus stable growth could broaden participation: cyclicals, industrials, and financials tend to join in when rate cuts loom and economic slowdown fears ease.

Right now, signs suggest tech remains the main driver, but rotation into other sectors could emerge if bond yields drift lower and confidence in a soft landing strengthens. In short: expect tech to lead in the near term, with a possible shift toward a more broad-based bull market if macro data keeps cooperating.

I would to see how the historical parallels (e.g., how past Nasdaq breakouts led or broadened into full bull markets) stacked up.

In the next section, here is a concise sketch of historical Nasdaq breakouts and what followed — useful for thinking about whether today’s move could broaden into a full bull market:

1. Dot-Com Run-Up (1998–2000)

Breakout: Nasdaq broke to new highs in late 1998 after the LTCM crisis, fueled by falling rates and tech euphoria.

Outcome: Led by tech almost exclusively. Breadth stayed narrow, valuations ran extreme, and when sentiment reversed, the broader market followed the Nasdaq down.

Lesson: A tech-led bull run can lift markets, but if too concentrated, it risks a sharp unwind.

2. Post-GFC Recovery (2009–2013)

Breakout: Nasdaq led the early recovery in 2009 as investors piled into high-growth names.

Outcome: Over time, the bull broadened — financials, cyclicals, and energy joined as monetary easing and growth recovery gained traction.

Lesson: A tech-led rally can be the spark for a broad bull if economic conditions stabilize.

3. Post-COVID Rally (2020–2021)

Breakout: Nasdaq surged first on tech/remote-work stocks.

Outcome: By late 2020–2021, cyclicals, commodities, and financials participated as vaccines and stimulus supported growth.

Lesson: Initial tech leadership can transition into broad-based participation once macro clarity improves.

Current parallel

Like 2009 and 2020, today’s environment (cooling inflation + rate-cut hopes) sets the stage for breadth to improve.

Key difference: valuations in mega-cap tech are elevated, so for a sustained broad bull market, earnings and flows into non-tech sectors must pick up.

In short: Nasdaq breakouts often start narrow, but the strongest, most durable bull markets broaden out. Today looks more like 2009/2020 than 2000 — suggesting potential for breadth, if the macro backdrop cooperates.

Here is a visual sketch of the $NASDAQ(.IXIC)$ (tech leadership) vs. $S&P 500(.SPX)$ breadth (broader market participation) across major cycles.

1998–2000 (Dot-Com): Nasdaq surged far ahead of market breadth, ending in a narrow rally and collapse.

2009–2013 (Post-GFC): Nasdaq led early, but breadth steadily improved, fueling a durable bull.

2020–2021 (Post-COVID): Tech broke out first, then breadth expanded as recovery broadened.

2023–2025 (Current): Nasdaq is again leading; the question is whether breadth follows (like 2009/2020) or stalls (like 2000).

In the next section, I would like to share how we overlay today’s valuation/earnings gap between tech and the rest of the market to make the comparison sharper.

Here is a sharper overlay of today’s valuation/earnings gap between tech and the broader market — comparing what we see now vs past cycles — to help you judge whether today’s move is likely to broaden or be more fragile.

Valuation / Earnings Gaps Today

How This Compares to Past Cycles

In 2000 (dot-com peak), tech P/Es were far higher, often 50-80× for many growth names; broad market valuations were elevated too, but the gap between tech & non-tech was larger and less justified by earnings growth.

In 2009-2013, after the 2008 crisis, tech valuations were elevated early, but earnings (and fundamentals) started catching up, allowing breadth to expand. Tech still led but had more support from other sectors.

In 2020-2021, the Covid-recovery era, multiples expanded across the board, not just for tech, because growth expectations rose everywhere (cyclicals, industrials etc.), and stimulus/liquidity helped. But tech still traded at a consistent premium.

What the Gap Tells Us & Risks

The current tech premium remains high versus both its own historical averages and the broader market. That means there is potential upside if earnings continue to exceed expectations, especially for AI / cloud / infrastructure-oriented tech.

But high valuation also means the margin for error is smaller: any disappointment in earnings, regulatory headwinds, rising interest rates, or slowing growth could pull this sector back significantly.

The negative earnings yield gap suggests that stock valuations require either interest rates to drop (making bonds less attractive) or corporate earnings to rise; otherwise, valuations may underperform or stagnate.

How We Can Trade Tech ETFs To Take Advantage

$Technology Select Sector SPDR Fund(XLK)$ offers investors direct exposure to mega-cap tech leaders driving the market’s current momentum. For those bullish on continued leadership from AI, cloud, and semiconductor names, buy-and-hold exposure in XLK allows participation in upside tied to earnings strength and innovation trends. Active traders might consider call options or bull call spreads on XLK to capture further gains with defined risk, especially if they expect tech to extend its lead.

At the same time, investors should be mindful that high valuations leave tech sensitive to shifts in rates or sentiment. A balanced approach is to pair XLK exposure with a broader market ETF (like SPY or equal-weighted S&P funds) or selectively rotate into cyclical sectors if economic data supports expansion. This way, portfolios benefit if leadership broadens beyond tech into a wider bull market. In short, XLK remains a strong vehicle for tech momentum, but complementing it with diversified exposure helps capture both continued leadership and a possible shift to broader market strength.

Here is how I would how I might structure a bull call spread on XLK (Technology Select Sector SPDR Fund) right now, plus rationale and risk/reward. (These are illustrative; real option prices will vary.)

Context

• Underlying: XLK

• Current price: ≈ US$271.06

• I am bullish on tech, expect continued leadership / upside over the next 1-2+ months, but want defined risk in case momentum fades or broader market doesn’t follow through.

How Bull Call Spread Setup Might Be Done

Hypothetical Profit / Loss

(Using example prices — you would fill in real quotes at the time you decided to trade)

• Say the $280 call costs $15.00 (premium you pay).

• The $310 call sells for $5.00 (premium you receive).

• Net debit = 15.00 − 5.00 = US$10.00 per share → US$1,000 per contract (100 shares).

Then:

• Max loss = US$1,000 (if XLK closed ≤ $280 at expiration).

• Max gain = (310 − 280 − 10) × 100 = (30 − 10)×100 = US$2,000.

• Breakeven at expiration = Long strike + net cost = $280 + $10 = $290. So you need XLK > ~$290 at expiry to profit.

Why this structure might make sense now

Gives us leveraged exposure to continued tech strength without needing a giant move immediately.

The OTM long call keeps cost down; selling the higher strike helps finance it.

If tech leads further and macro / earnings data are favorable, upside is there. If not, losses are capped.

Final Note: Tech Leads, but Watch for a Broader Rally

Given how today’s valuation gap is elevated but not yet at extreme dot-com levels, there is room for a broad bull market if the following happen:

Earnings growth becomes more evenly distributed across sectors (not just in tech),

Rates begin to fall / yield curve steepens so that bond yields become less competitive, and

Investor risk appetite remains strong.

If those conditions fail, we might see more of a tech-led rally that doesn’t broad base out, or possibly valuation compression from the top dragging down indexes.

Summary

Based on the current environment, the market appears to be in a bull market with a strong tech-sector focus. The tech sector is leading the way, fueled by AI and strong corporate fundamentals.

However, the in-line CPI data is a crucial piece of the puzzle that could act as a catalyst for a broader market rally. If it leads to a clear and credible path for interest rate cuts, it would create a more favorable environment for all sectors.

Therefore, while the tech sector is currently the primary engine of growth, it's wise to watch for signs of the bull market broadening out. This would involve seeing other sectors like industrials, financials, and consumer goods start to consistently outperform.

Appreciate if you could share your thoughts in the comment section whether you think as tech leads, we as investors should look out for broader bull market rally.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.