Asset correlations across different categories are behaving abnormally, leaving even seasoned traders puzzled.

Bobby Molavi, a macro trader at Goldman Sachs, noted that the stock market continues to rise despite numerous concerns, with indices, individual stocks, and commodities like gold reaching historical highs. Meanwhile, volatility remains constrained regardless of news developments, driven by strong retail buying and a surge in artificial intelligence-related expenditures.

"Everything feels strange," Molavi remarked, stating that the traditional correlations between bonds, stocks, and gold have completely "broken down."

The S&P 500 index has risen 15% this year and has repeatedly hit all-time highs. In recent weeks, concerns over the trade war and a potential U.S. government shutdown have impacted market sentiment, but a solid start to the earnings season and signs of robust economic growth have maintained the bullish narrative.

"We will wait and see whether this is yet another 'blip' (rather than a correction) or a 'canary in the coal mine' (a warning signal)," Molavi wrote in a report to clients as the head of Goldman Sachs’ EMEA operations. "In any case, this is, in many respects, a 'post-modern' market."