Quick overview

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The bull market on Wall Street gained new momentum at the end of a month that has lived up to its reputation, as optimism about earnings overshadowed worries about a rally that is mainly concentrated on tech giants. After the S&P 500’s roughly $17 trillion surge paused, the index rose thanks to positive outlooks from Amazon.com and Apple.

Not all megacaps experienced gains, but. A decline in Chinese sales also lessened hopes for an active holiday season, causing the iPhone maker’s advance to weaken. Bond prices stabilized after a Federal Reserve sell-off.
Stock traders faced a lot, including trade and geopolitical risks, a US government shutdown, and high valuations. Ultimately, confidence in Corporate America and bets that rate cuts will sustain profit growth prevailed. The S&P 500 has climbed nearly 40 percent since the April downturn, marking its longest monthly advance since 2021.

Yet, many see this as just another example of “glass half empty” arguments from bears whose previous claims have mostly faded. Consequently, skepticism about participation in the rally has grown. The Nasdaq 100’s story is even more impressive: tech’s solid balance sheets and AI optimism fueled a seven-month rally, the longest winning streak in eight years.

The S&P 500 has gained about 16 percent so far this year. Historically, gains of more than 10% from January to October have indicated favorable outcomes for the following two months. An 86 percent historical success rate during a seasonally strong period suggests good odds, he noted. Still, traders are advised to make prudent capital decisions and prepare for the possibility that things may not go as planned.

According to Chris Senyek of Wolfe Research, “a key question we’ve been receiving in meetings lately is whether performance will broaden out,” with markets remaining near all-time highs, driven once again by a handful of stocks. He concluded that the large-cap leadership would continue through year-end, despite mid-cap valuations still sticking to their long-term median due to the lack of earnings growth over the past few years.