Current Bull Market Hits Four-Year Milestone with Unprecedented Performance
The S&P 500 has risen by 12% year to date, despite recent declines in AI-related stocks. Last week saw a 2% drop driven by concerns over the sustainability of demand for artificial intelligence and high capital expenditures required for infrastructure development. CoreWeave fell more than 25%, while semiconductor companies Micron Technology and Advanced Micro Devices dropped significantly as well. However, this bull market has reached its four-year anniversary with notable resilience. It is unique in that it's the only post-WWII bull market to deliver double-digit gains each year for the first four years. Sam Stovall of CFRA noted historical data suggests such markets often continue into a fifth year, averaging nearly 21% growth. Despite concerns about high valuations—currently at a forward P/E ratio near 23—the S&P's strong earnings growth may justify these levels. Third-quarter earnings are expected to rise by almost 29%, according to FactSet data.
Topics: AI stocks bull markets earnings growth S&P 500