Amidst geopolitical and economic turmoil, the US stock market shows significant growth.

Historical Highs for the S&P 500 Index

Despite global instability and dashed hopes for a rate cut by the Federal Reserve, the S&P 500 index reached its second-highest close in history this week. Year-to-date, the index has risen by over 1,000 points and has surged 40% since October 2023. This represents a staggering $14 trillion increase in market cap.

The Role of Technology and AI

Technology companies and sectors tied to artificial intelligence have driven growth. The Russell 1000 Growth Index has surged nearly 11% this year, even as other sectors, like value stocks, lag behind. The 'Magnificent Seven'—Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia, and Tesla—account for about 60% of the recent gains in the S&P 500 index.

Optimistic Future Outlook

Historically, the US stock market has rebounded from major downturns, such as the 2008 financial crisis and the COVID-19 pandemic. Some UBS analysts believe the US might be poised for a 'Roaring '20s'-like economic boom. This outlook is supported by expected advancements in AI and technological innovation, reminiscent of the adoption of electricity and cars in the 1920s.

Despite potential risks from rising inflation and economic downturn, many investors are confident in continued growth, relying on historical trends and current technological advancements.