After the recent changes in the composition of the S&P 500, some new companies (e.g. Robinhood) recorded spectacular growth, with one report mentioning increases of 200% for the leaders this year. The main drivers of growth are the topics of AI, storage, and the return of retail demand for digital financial services. This phenomenon shows how entry into the index and hopes for greater interest from funds can trigger strong short-term rallies.
Risk: Sharp movements imply that a phase of euphoria could be followed by corrections, especially if fundamentals fail to sustain revenue growth. For a long-term investor, it is worth assessing the scalability of the business model and margins before considering a rally sustainable.
From a tactical point of view: you can consider gradually building positions and using options/stop-losses to limit risk in the event of sudden sentiment reversals.