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The bull market is back. Or rather, it’s been with us for a while.

The S&P 500′s record high close on Friday confirms the index has been in a bull market since it bottomed on Oct. 12, 2022, by one measure. The index has gained 35% since then and closed at 4,839.81 after rising 1.2% in Friday’s session.

Signs of slowing inflation and a dovish pivot from the Federal Reserve in late 2023 helped to accelerate stocks’ advance, sending the S&P 500 to a 24% annual gain. In recent days, a rally in chip stocks fueled by optimism over the business potential of artificial intelligence has lifted the index further.

As stocks have tended to rise more than fall throughout their history, the S&P 500 has been in a bull market for roughly 85% of the time since 1950. The index has notched an average gain of nearly 260% during the six bull markets that have occurred in the last four decades.

History also shows that the momentum that carried stocks to a record often tends to continue over the longer term. In 13 of the previous 14 instances when the S&P 500 set an all-time high for the first time in more than a year, the rally continued over the next 12 months, with an average return of 13.9%, data from Clearbridge Investments showed.

That compares to the S&P 500′s average annual return of 7.5% since 1928.

The index’s rally since October 2022 has been driven by Wall Street’s technology-related giants, including Microsoft , Tesla and Google parent Alphabet. Given their heavy weighting in the S&P 500, the stocks accounted for 62.18% of the index’s total return in 2023, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

All told, the S&P 500 technology sector has surged more than 70% from the S&P 500′s October 2022 low. The communication services sector, home to Meta Platforms and Netflix, is up nearly 60%.

Another factor powering stocks has been excitement over artificial intelligence technology, giving a powerful boost to companies such as Nvidia, now the world’s most valuable chipmaker after its stock tripled in value last year. Those gains have continued in 2024, sending Nvidia’s shares to a record high on Friday.

Strength in the small-cap Russell 2000 in December sparked hopes that Wall Street’s rally was broadening to include other parts of the market. However, the Russell has fallen 4.1% so far in 2024, compared with the S&P 500′s 1.4% gain, suggesting Wall Street’s most valuable companies continue to reap the bull market’s gains.

The S&P 500 put up strong gains in 2023 despite a lackluster year of profit growth, with earnings expected to have risen by only 2.8% for the full year, according to LSEG data.

But investors are counting on a stronger performance in 2024, with earnings estimated to increase 10.9% for the year.

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