From AI to gold and US Treasury bonds: almost everything is surging to new highs, the market is experiencing an "Everything High".
The global market is entering a rare "Everything High" phase: corporate earnings, capital expenditures, commodities, interest rates, and market positioning are all approaching historical extremes.
The most significant change comes from AI. Capital expenditures by US hyperscale cloud providers over the next 12 months are expected to rise to $940 billion, more than three times the level at the beginning of 2025; meanwhile, S&P 500 earnings growth forecasts for 2026 have risen to 34%, far exceeding the 15% at the beginning of the year.
But this boom isn't limited to the tech sector. Rapidly rising energy prices, continued increases in gold reserves, US Treasury yields reaching multi-year highs, and improved earnings and economic data in emerging markets and Europe are all contributing to a broader global growth landscape.
The problem is that when growth, inflation, interest rates, and positioning all reach high levels simultaneously, market optimism is becoming more fragile. Whether AI capital expenditure can be sustained, whether rising energy prices will push up inflation again, and whether a reversal of crowded trades will amplify volatility are becoming variables that the market needs to be wary of.
AI capital expenditures surge, and profit expectations rise in tandem.
The core driver of this market rally remains the super cycle of AI capital expenditure. According to Bank of America data, the consensus forecast for capital expenditure by US hyperscale cloud vendors over the next 12 months has risen from less than $300 billion at the beginning of 2025 to $940 billion, more than tripling in size and expanding at a rate far exceeding previous technology investment cycles.
The surge in capital expenditures is also reshaping profit distribution in the technology industry. AI demand is driving funds from hyperscale cloud providers to semiconductor companies, with the Philadelphia Semiconductor Index showing a high correlation to revisions in quarterly operating profit expectations. Meanwhile, AI commercialization is accelerating; as of the end of August, the annualized revenue of the AI economy had reached $229 billion, a 3.5-fold increase in one year.
Earnings are also exceptionally strong. According to Compound data, the S&P 500's earnings growth forecast for 2026 has risen to 34%, a significant upward revision from 15% at the beginning of the year. This growth rate typically only occurs during the earnings recovery phase after a recession, but the US economy has not yet entered a recession.
Goldman Sachs also pointed out that profit margins in the technology sector are already at historically high levels, driven by both cyclical and structural factors, and the technology industry is expected to contribute about a quarter of global corporate profits over the next 12 months.
Source: Bank of America
Behind the "everything is rising in price" phenomenon, inflationary pressures are accumulating again.
The problem is that overheated growth is leaving its mark on commodity prices and energy costs.
Refined fuel oil crack spreads have risen to record highs, gasoline futures have surged by about 30% in a month, and diesel prices are approaching $6 per gallon; U.S. electricity prices are also continuing to hit new highs. This rapid rise in energy prices, once it is passed on to consumers, will retest market expectations of declining inflation.
Gold is also in a strong cycle, with central banks around the world continuing to increase their holdings, indicating that even as risk assets continue to strengthen, market demand for traditional macro hedge assets remains strong.
More notably, inflationary pressures and spreading growth are occurring simultaneously. Emerging market earnings growth is projected to reach 72% this year, and the Eurozone's economic surprise index has risen to a multi-year high. From energy to gold to global earnings, asset prices and fundamentals are pushing together to higher levels.
Source: Bank of America
Under high-level resonance, the most dangerous thing is crowded trading.
More alarming than the overvaluation of a single asset is the fact that positions in different markets are becoming crowded simultaneously.
The yield on the 10-year US Treasury note has risen to its highest closing level since 2023, and net long positions in the US dollar are at historically high levels. Deutsche Bank data shows that equity allocations in volatility control strategies have reached the 100th percentile historically. The previously prolonged low-volatility environment prompted these strategies to increase their equity exposure; however, if volatility rebounds, mechanical reductions in positions could further amplify market volatility.
The supply of stocks is also increasing simultaneously. Goldman Sachs predicts that the total value of dollar-denominated stock issuance will reach approximately $700 billion in 2026, a record high, with IPOs exceeding $225 billion and other equity financing around $450 billion. In an environment of high valuations, companies are accelerating financing, meaning that while the market enjoys a risk-averse environment, it is also continuously absorbing new stock supply.
Therefore, what we really need to focus on right now is not whether a particular indicator has peaked, but whether there will be a reversal after a period of high-level convergence in earnings, capital expenditure, commodity prices, interest rates, and portfolio allocation. As long as growth and AI investment remain strong, this logic can continue; however, once inflation or interest rates become a constraint again, extremely crowded positions could cause the market to adjust significantly faster than the fundamentals deteriorate.
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