**[Viewpoint: U.S. Stock Market Experiencing a "Hidden Bear Market," Potential Historic Opportunity if Macro Pressures Ease]** BlockBeats News, October 18 – The Kobeissi Letter published an article stating that the U.S. stock market is currently exhibiting a "hidden bear market within a bull market": while the S&P 500 Index is only about 2% below its all-time high, the majority of its constituent stocks have experienced significant pullbacks. The institution believes that macroeconomic pressures have suppressed stock valuations, while the large tech companies supporting the index's rise still have a foundation for earnings growth. According to the report, 84% of S&P 500 constituents have pulled back at least 10% from their all-time highs, 59% have pulled back at least 20%, 41% have pulled back more than 30%, and 17% have pulled back more than 50%. The index's gains are highly concentrated in a few companies. The institution also pointed out that market expectations for interest rates have shifted significantly. At the beginning of the year, investors expected the Federal Reserve to cut rates at least three times by 2026, totaling 75 basis points. Currently, the Fed has raised rates once, and the market now expects three more rate hikes by June 2027. Despite oil prices exceeding $100 and inflation nearing 4%, the S&P 500 remains close to its historical highs. One of the bullish arguments is earnings growth. The S&P 500's composite earnings growth rate for Q2 2026 reached 52%, the highest since Q2 2021. Over the past 12 months, NVIDIA's stock price has risen 21%, while its price-to-earnings ratio has dropped 46%; its current forward P/E ratio is approximately 24x, close to the S&P 500's 22x. The institution believes that the large-cap tech stocks driving the index's gains still reflect significant macroeconomic discounts. The current market concentration is favorable for the S&P 500 or, at the very least, does not yet pose a problem. Looking ahead, the institution suggests that if signs of an end to the Iran war emerge and the global energy crisis eases, energy prices and inflation expectations could decline, prompting the Federal Reserve to adopt a more dovish stance. This could lead to the dissipation of valuation discounts for tech stocks and a broader rally across more stocks. It also noted that if the Iran war had never occurred, the S&P 500 might already be above 9,000 points. [Original Link]