The past two years have been strong for investors, with the S&P 500 posting back-to-back gains of over 20 percent. At the start of this year, the S&P 500’s previous all-time high was set in January 2022 (4,796 on the first trading day of 2022). It took over two years to reclaim the prior high, but once the index broke through in late January 2024, it set more than 50 new highs this year.
The number of all-time highs illustrates the current bull market’s strength and persistence, which could continue with further new highs by year-end. Large-cap technology stocks have posted strong returns and played a major role in driving the index’s gains. The S&P 500’s record-setting performance is part of a broader cross-asset rally that has lifted stocks, bonds, and commodities this year.
In our opinion, the stock market’s steady climb speaks to investors’ growing confidence. We believe investors are optimistic about the artificial intelligence industry’s growth potential. The economy has outperformed expectations, driven by strong consumer spending, growing at an above-trend rate during the past two quarters despite high interest rates.
After the November election, the stock market rally intensified as investors focused on the incoming administration’s policy agenda. Expectations for tax cuts, deregulation, and energy production are fueling hopes for stronger economic growth.
The bond market echoes this confidence in the economy, as high-yield credit spread tightness is at levels not seen since 2007.
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Wells Fargo Advisors Financial Network did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the author(s) and are not necessarily those of Wells Fargo Advisors Financial Network or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.
S&P 500 Index: The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market value weighted index with each stock’s weight in the Index proportionate to its market value.
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