New York
CNN
—
Wall Street is excited again.
The S&P 500 ended the day in a bull market on Thursday, marking a 20% rally from its most recent low, reached on October 12, 2022. This ends the bear market that started in January 2022.
Bolstered by gains in major tech stocks, the broad-based index closed at 4,293.93 and crossed the threshold that separates a bull market from a bear market — investor talk for a period marked by rising stock prices and rising optimism on Wall Street. Investors are definitely in a buying mood: CNN Symbol of fear and greed Jupiter hit “Extremely Greedy”.
Markets have been surprisingly resilient over the past nine months, as 2022 losers such as tech and media have bounced back from a disastrous year in hopes that those industries’ doldrums are over.
The AI boom has fueled interest in the tech stocks that dominate the S&P 500. After a terrible year for Big Tech, hope is back as ChatGPT makes AI it-ding in Silicon Valley. Investors are placing big bets on Google, Meta, Apple, Amazon, Nvidia and others, believing they can create a new technological revolution with artificial intelligence.
Over the past week, markets have gained momentum and this may have ended Debt ceiling crisisThe Federal Reserve will hold off on interest rate hikes at its June meeting and is the latest string of strong Economic metrics.
While all this is positive for the economy, analysts fear that this could be a short-term rally that will bite investors. Inflation is too high for comfort. The U.S. economy is still adding jobs, but the pace is often slow. Consumers are still spending, but they are pulling back on discretionary spending, focusing on necessities like clothing and food and leisure activities.
This is not a recipe for long-term market success.
“We’re very late in the economic cycle and it’s going to start slowly and head into a recession later this year,” Sameer Samana, senior global market strategist at Wells Fargo Investments, told CNN. “The key difference for us is that bull markets coincide with economic expansions, not economic contractions.”
However, since the last bull market, we have had a war in Europe, a banking crisis and a credit crunch among other dramas. Markets are in uncharted territory, and while a Wall Street boom could be the first recession to hit, “in this market, you never say never,” Samana said.
