What factors are driving the potential melt-up in the US stock market?

There are several factors that can contribute to a melt-up in the US stock market. One of the primary causes is investor optimism, which can lead to a rush of buyers seeking to chase returns. This can be driven by a variety of factors, including changes in monetary policy, corporate earnings reports, and investor sentiment. For example, if the European Commission (EC) approves the label expansion of Ayvakit (avapritinib) to include the treatment of adult patients with indolent systemic mastocytosis (ISM) with moderate to severe symptoms inadequately controlled on symptomatic treatment, it could lead to increased investor confidence and a surge in the stock price of Blueprint Medicine BPMC. Additionally, factors such as changes in oil prices, Fed rate hikes, and high treasury yields can also impact the stock market. For instance, if oil prices rise, it could lead to increased inflation and slower economic growth, which could in turn affect stock market performance. It's important to note that melt-ups are often driven partly by a large number of new investors seeking to chase returns, rather than by fundamental improvements in the economy. As such, they are considered to be unreliable indications of the direction the market is ultimately headed.