Victory of the WestEuropean stock markets rose on Friday, taking momentum from Wall Street after a strong day in the United States. The S&P 500 and Nasdaq closed at their best closes since August 2022, led by technology stocks - NVIDA won't quit (AI game), up 116% year-to-date. Meanwhile, the DAX rose to a new all-time high this morning - 16,290.19 is the magic number. Asian markets were mixed as weak results from Alibaba weighed on sentiment, but the Nikkei closed at its highest level since 1990. The FTSE 100 is up about a third at 7,770.Is it over? I don't think so. Bear Stearns, remember, collapsed on the same weekend as SVB this year - a rally that lasted several months before unravelling. The question is whether megacap tech can keep the ship right, or can momentum get a kick from the laggards? These breakthroughs seem more like fakes... The Fed can only move into this environment by raising rates.Index improvementSPX/NDX/DJI - SPX has finally broken through 4,200. DJI is testing the top of the megaphone, at the confluence of MA support, and a potential bullish MACD crossover is coming? The NDX is up a fifth this year.Dancing on the ceilingThe US debt ceiling negotiations are going on somewhere... This will definitely help lift the mood. But I would question whether a deal can be sustained if it leads to a tonne of issuance pushing up yields and leading to tightening. Treasury yields, which rose with the 10-year yield to 3.65%, are now back down, but remain firmer overall. That added to pressure on gold, which extended May losses yesterday, also from a stronger dollar. The price firmed to $1,966 this morning.A rate rise is more likelyThe market is increasingly leaning toward a June rate hike - as I said early in the month after the Fed's May meeting, Powell's job is not to signal a pause in June, but to leave the door open for another hike. Why hike? The job market won't stop -- continuing jobless claims fell below 1.8m yesterday, while initial claims also fell; GDP trackers point to acceleration; Inflation remains intractable. Dallas Fed President Lori Logan said June's economic data did not need a pause. I just don't understand how the Fed could pause at this pace in June.Land of the yenJapanese inflation is at its highest level since 1981. Core consumer inflation remained well above the central bank's 2 percent target in April, hitting expectations of 3.4 percent year on year. The Bank of Japan is under pressure but insists inflation will come down. The dollar fell sharply against the yen after hitting its highest since November yesterday, as traders bet the inflation data was pushing the Bank of Japan to take something akin to normalisation.Elsewhere, the dollar is still rallying as markets support further Fed rate hikes. GBP trades at 50-MA support.