Bubble Talk Returns as Bulls Eye Another Big Run

The market paused briefly after another record high this week — but bullish confidence is still running hot.

Despite sky-high valuations, investors are betting that the upcoming third-quarter earnings season will justify their optimism. Even Washington’s political chaos isn’t shaking sentiment. Fundstrat’s Tom Lee says investors see through the U.S. government shutdown “noise,” expecting any slowdown to make the Federal Reserve more dovish.

Add the typical year-end rally, as fund managers chase performance and load up on winning stocks, and the stage seems set for another leg higher. Lee still sees the S&P 500 reaching 7,000 by year-end.

But a familiar warning is back: talk of a market melt-up. Billionaire trader Paul Tudor Jones compared today’s setup to late 1999, when the Nasdaq doubled in six months before the dotcom bubble burst.

“All the ingredients are in place… you have to position yourself like it’s October 1999,” Jones told CNBC.

That remark caught attention — especially from traders who believe they can ride the rally and get out before it pops. The Nasdaq is already up 19% this year.

Yet Matthew Maley of Miller Tabak says investors shouldn’t expect a straight climb. “Even during that 1999 melt-up, the Nasdaq saw multiple 13–14% pullbacks before peaking,” he noted.

Maley warns that similar volatility could strike again as earnings season heats up and fresh data flood in once the government reopens.

His takeaway: even if Jones is right and another surge is coming, the ride could be far bumpier than most traders think.