The bull market turned 4 years old on Monday. Investors say reaching a fifth birthday could be challenging
The S&P 500 has climbed almost 120% since its closing low on Oct. 12, 2022.
TL;DR
- The current bull market is celebrating its fourth anniversary, with the S&P 500 up nearly 120% since its Oct. 12, 2022 low.
- Investor enthusiasm for artificial intelligence has driven significant gains in tech stocks, with Nvidia and Micron Technology reaching trillion-dollar market caps.
- The S&P 500 has surpassed 7,800 for the first time, with tech stocks comprising about 40% of the index.
- Concerns about inflation, surging bond yields, and a hawkish Federal Reserve are present.
- Market breadth has deteriorated, with a significant percentage of S&P 500 stocks closing in negative territory in September.
- Small-cap stocks have particularly suffered.
- Analysts like Ari Wald suggest the bull market's peak could be around 13 months away, potentially in 2027, though median fifth-year returns indicate further gains are possible.
- Deutsche Bank strategist Parag Thatte believes the rotation into tech may be overdone.
- Despite challenges, some investors remain optimistic due to strong fundamental earnings driven by the AI build-out.