The SPDR S&P 500 (SPY) and Invesco QQQ (QQQ) ETFs are on a tear, reaching all-time highs. SPY has seen three consecutive weeks of gains, hitting a record $530, while QQQ has surged to $452. This bull run is fueled by three key factors: robust earnings growth, potential Fed rate cuts, and analyst optimism.

Earnings growth is at its highest level since Q2'22, with 78% of S&P 500 companies reporting results that beat consensus estimates. This impressive performance is a testament to the strength of the US economy and the resilience of corporate America. Companies like Walmart, Microsoft, Amazon, and Alphabet have reported strong results, indicating a broad-based recovery.

The potential for Fed rate cuts is another significant catalyst driving the equity rally. With inflation under control and economic growth slowing, the Fed may start cutting interest rates soon. This would be a significant boost to stocks, as lower rates make equities more attractive compared to bonds. Analysts predict that the Fed will deliver at least one rate cut this year, which could further fuel the bull run.

While some investors may consider selling in May and moving to cash or bonds, history shows that SPY and QQQ ETFs always bounce back from drawdowns. With earnings growth, potential rate cuts, and bullish catalysts on the horizon, it may be risky to miss out on this equity rally. Investors should consider staying invested in the market and taking advantage of the potential upside.