Speculation and FOMO drive the 2025 stock market rally

The stock market continues to reach record highs in 2025, fueled by speculative trading and a fear of missing out (FOMO) among investors. This has led to gains in riskier stocks. Megacap stocks and meme stocks like Palantir have significantly outperformed the broader market, alongside a surge in unprofitable tech companies. This rally is driven by retail investors and a "lower quality tilt" towards riskier investments. Experts warn of increasing complacency and a disconnect from fundamentals, as momentum-driven trading overshadows traditional valuation metrics. Some fear this speculative behavior could lead to a market correction.