US equities struggled to maintain gains as investors grappled with the looming threat of a potential 'massive' US attack on Iran and renewed concerns about artificial intelligence spending.

The market's cautious sentiment was underscored by Capital Economics' analysis, which suggested a possible rally in major indices later this year before a significant correction in 2027.However, analysts warned that the market could have already peaked, highlighting the precarious balance between optimism and risk.

The article notes that geopolitical tensions and AI-related uncertainties continue to cast shadows over equity markets, with megacap tech companies' earnings reports serving as critical catalysts for investor confidence.

Despite these challenges, some experts remain cautiously optimistic about a potential rebound, though they caution against complacency in the face of ongoing global uncertainties.