Happy Birthday to the Bull Market – it has just turned four years old.
Monday marks the fourth anniversary of this current bull market. Since the closing low on October 12, 2022, the S&P 500 index has risen by nearly 120%, a remarkable gain that reflects Wall Street's confidence in the transformative power of artificial intelligence.
Since the release of ChatGPT at the end of 2022, investors have flocked to all assets related to AI transactions. Among them, the stocks most closely associated with the infrastructure construction of AI – the so-called "shovel-selling" companies – have soared to new highs due to this technology.
NVIDIA is a representative company in this revolution. In the past, it was mainly known for producing graphics cards for high-end video games, and today its market value is approximately $5.5 trillion; it surpassed a market value of $1 trillion for the first time in 2023. Another beneficiary, Micron Technology, also surpassed a market value of $1 trillion for the first time in May of this year.
These trends have helped the stock market “climb over the wall of concerns” over the past few years, and this is still the case in 2026 as well. The S&P 500 index just surpassed 7,800 points for the first time last week and is still close to record highs, largely due to its heavy allocation to tech stocks. Approximately 40% of this broader index is composed of tech stocks.
After such an extraordinary rise, investors began to wonder how much longer this upward trend could continue, especially amid ongoing concerns such as higher inflation, soaring bond yields, and a more hawkish Federal Reserve.
From a technical perspective, the road ahead doesn't seem so ideal.
According to Oppenheimer's Ari Wald, the current bull market is the sixth longest among the 24 bull markets since 1932. Wald wrote after observing the data that the median remaining time before a cycle peak is 13 months, which means that 2027 could become the last phase of this upward trend.
However, Wald also added that the median return rate in the fifth year is still 21%, which means that investors may still see further increases before any peak is reached.
How much longer the current cycle can last may depend on the breadth of the market, which has already deteriorated. In September, 75% of the stocks in the S&P 500 index closed lower, and the threat of rising interest rates prompted investors to shift their focus back to a handful of very large-cap companies.
Especially small-cap stocks are under pressure. Wald indicates that he is closely monitoring the Russell 2000 Index's test of its 200-day moving average to determine whether there is still room for further upward movement in the bull market.
"In our view, relative weakness remains a warning rather than an opportunity until a stronger market condition is re-established," writes Wald.
Financial reports are also a concern. Although the third-quarter financial reporting season is expected to perform strongly, some people worry that, given that expectations have already been raised quite high, the results may still not be sufficient to drive stock prices further upward.
This is especially true for tech stocks. Parag Thatte, a strategist at Deutsche Bank, writes that he believes the rotation of funds into tech stocks has gone too far, and the risk-return ratio is no longer attractive.
However, many investors remain optimistic about the stock market, as the resilience over the past four years reflects strong fundamental earnings in the wave of AI construction – although selecting winners may become more difficult.
"In order to outperform the market, investors need to hold stocks that grow rapidly and are less likely to fail – this remains our motto," wrote Adam Parker, the founder of Trivariate Research, on Sunday.
He then added, "We continue to believe that the U.S. stock market will perform well."
