We’re on the cusp of a new bubble. Maybe.

With US equities back at records, the Fed poised to start cutting again and the Trump administration now seemingly keen to fuel the rally rather than view it as an opportunity to re-escalate trade tensions (renewed friction with Canada notwithstanding), the door’s open to a bull run.

On Friday, Beijing confirmed that China and the US have in fact formalized the handshake arrangement conceived in Geneva last month. The Party will expedite rare earth shipments and Trump will reciprocate by “canceling a series of restrictive measures taken against China,” as Xi’s Commerce Ministry put it.

Late Thursday, Howard Lutnick teased a bevy of other trade frameworks and accords, and Karoline Leavitt called the ostensible July 9 tariff deadline “not critical.” “Perhaps it could be extended,” she told the press. (Trump adopted a somewhat more confrontational tone in a Friday media event).

The cherry on the proverbial sundae: Scott Bessent announced that Trump’s removing the so-called “revenge tax” from his “big beautiful bill” after G7 nations agreed to exempt US companies from some provisions of a global tax accord despised by The White House.

Add all of that up and you get a pretty bullish setup for equities, with the obligatory caveat that Trump’s prone to abrupt mood swings. As the figure below shows, the S&P heads into Q3 having erased the entirety of the Trump mini-bear market to trade back at February’s records.

It seems more likely than not that US shares will build on recent gains and melt up into what’s already a sweltering summer in some locales, one of mine included.

In their mid-year outlook, JPMorgan described a “dual equity pain trade” defined by markets squeezing higher on narrowing leadership. “Investors are not positioned” for the market to melt up, the bank said, noting that institutional investors “sold to corporate and retail buyers during the panic selloff in April” and are now “chasing the market higher.” “Most investors,” the bank wrote, would be wrong-footed if leadership were to narrow again.

BofA’s Michael Hartnett, writing in the latest installment of his popular weekly “Flow Show” series, said some of the bank’s trading rules are flirting with “sell” signals, but as he put it, “bubbles ignore trading rules.”

Unless headline jobs growth decelerates below 100,000 and/or 30-year US yields move meaningfully and sustainably above 5%, “bubble risk” is high in the back half of the year, Hartnett said.

Between a Fed that’s under pressure to lower rates and an administration that’s pivoting from tariffs to tax cuts, the Nasdaq 100 could “rip to 30,000,” Hartnett went on, suggesting the powers that be in America may try to engineer a boom to reduce the US debt burden.

On Friday, Bessent suggested the administration could wrap up its trade agenda by Labor Day. And the Magnificent Seven, as a group, was on track to erase its YTD losses. What’s not to like?