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ETFs in Focus as S&P 500 Confirms Bull Market: How Long Will It Last?
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The S&P 500 is officially in a bull market now, marking a significant milestone with a record high close achieved on Jan 19, 2024, after two years of fluctuating performance. This remarkable achievement was driven by a surge in chipmakers' stocks due to optimism surrounding artificial intelligence (AI) and investor expectations of Federal Reserve interest rate cuts in 2024.
S&P 500's Record High Close
On a triumphant Friday (i.e. Jan 19, 2024), the S&P 500 climbed 1.2% to close at 4,839.81 points, surpassing its previous record close of 4,796.56 on January 3, 2022. This record high close confirms that the S&P 500 has transitioned from a bear market when it closed on October 12, 2022, to a bull market, as per one measure.
The Dow Jones Industrial Average also marked its bull market status on December 13, 2023, confirming that it has been in a bull market since September 30, 2022, adding to the positive sentiment in the market.
Historical Trend
The recent journey of the S&P 500 aligns with historical patterns, as the time between record highs since the 1920s typically spans nearly two years. This consistency was observed by LSEG, offering context to the index's performance, as quoted on Reuters.
Chipmakers Drive the Rally
The S&P 500's record-breaking performance was fueled by a rally in chipmakers and heavyweight technology stocks, primarily driven by optimism surrounding artificial intelligence (AI). This was highlighted by the substantial gains of Nvidia (NVDA) and Advanced Micro Devices (AMD), both of which saw significant increases in their stock prices. The rise of chipmaker stocks was influenced by Taiwan Semiconductor Manufacturing Company's announcement of surging demand for high-end chips used in AI.
Rate Cut Expectations
Amid the market's resurgence, expectations of a Federal Reserve interest rate cut in March 2024 gained traction, with interest rate traders now estimating a 52% chance of such a cut, according to the CME Group's FedWatch Tool.
Consumer Sentiment Boost
Another positive factor contributing to the market's optimism was the University of Michigan's preliminary survey, revealing improved consumer sentiment in January, reaching its highest level since the summer of 2021.
ETFs In Focus
Despite the celebratory atmosphere, the sustainability of the S&P 500's record level hinges on corporate earnings meeting expectations. Still, investors with a strong stomach for risks can bet on S&P 500 ETFs if they believe that the ongoing bull market will last for a moderate period of time.
Against this backdrop, investors may track S&P 500 ETFs like Vanguard S&P 500 ETF (VOO - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) and SPDR S&P 500 ETF Trust (SPY - Free Report) . Investors can also play the growth part of the index with SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report) and the value part of the index with SPDR Portfolio S&P 500 Value ETF (SPYV - Free Report) .
SPDR Portfolio S&P 500 High Dividend ETF Fund (SPYD - Free Report) is a good bet for the dividend plays of the index. Investors can also bet on the leveraged S&P 500 ETFs like Direxion Daily S&P 500 Bull 3X Shares (SPXL - Free Report) , ProShares Ultra S&P500 (SSO - Free Report) and ProShares UltraPro S&P500 (UPRO - Free Report) if the index is on an uptrend.
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)
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ETFs in Focus as S&P 500 Confirms Bull Market: How Long Will It Last?
The S&P 500 is officially in a bull market now, marking a significant milestone with a record high close achieved on Jan 19, 2024, after two years of fluctuating performance. This remarkable achievement was driven by a surge in chipmakers' stocks due to optimism surrounding artificial intelligence (AI) and investor expectations of Federal Reserve interest rate cuts in 2024.
S&P 500's Record High Close
On a triumphant Friday (i.e. Jan 19, 2024), the S&P 500 climbed 1.2% to close at 4,839.81 points, surpassing its previous record close of 4,796.56 on January 3, 2022. This record high close confirms that the S&P 500 has transitioned from a bear market when it closed on October 12, 2022, to a bull market, as per one measure.
The Dow Jones Industrial Average also marked its bull market status on December 13, 2023, confirming that it has been in a bull market since September 30, 2022, adding to the positive sentiment in the market.
Historical Trend
The recent journey of the S&P 500 aligns with historical patterns, as the time between record highs since the 1920s typically spans nearly two years. This consistency was observed by LSEG, offering context to the index's performance, as quoted on Reuters.
Chipmakers Drive the Rally
The S&P 500's record-breaking performance was fueled by a rally in chipmakers and heavyweight technology stocks, primarily driven by optimism surrounding artificial intelligence (AI). This was highlighted by the substantial gains of Nvidia (NVDA) and Advanced Micro Devices (AMD), both of which saw significant increases in their stock prices. The rise of chipmaker stocks was influenced by Taiwan Semiconductor Manufacturing Company's announcement of surging demand for high-end chips used in AI.
Rate Cut Expectations
Amid the market's resurgence, expectations of a Federal Reserve interest rate cut in March 2024 gained traction, with interest rate traders now estimating a 52% chance of such a cut, according to the CME Group's FedWatch Tool.
Consumer Sentiment Boost
Another positive factor contributing to the market's optimism was the University of Michigan's preliminary survey, revealing improved consumer sentiment in January, reaching its highest level since the summer of 2021.
ETFs In Focus
Despite the celebratory atmosphere, the sustainability of the S&P 500's record level hinges on corporate earnings meeting expectations. Still, investors with a strong stomach for risks can bet on S&P 500 ETFs if they believe that the ongoing bull market will last for a moderate period of time.
Against this backdrop, investors may track S&P 500 ETFs like Vanguard S&P 500 ETF (VOO - Free Report) , iShares Core S&P 500 ETF (IVV - Free Report) and SPDR S&P 500 ETF Trust (SPY - Free Report) . Investors can also play the growth part of the index with SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report) and the value part of the index with SPDR Portfolio S&P 500 Value ETF (SPYV - Free Report) .
SPDR Portfolio S&P 500 High Dividend ETF Fund (SPYD - Free Report) is a good bet for the dividend plays of the index. Investors can also bet on the leveraged S&P 500 ETFs like Direxion Daily S&P 500 Bull 3X Shares (SPXL - Free Report) , ProShares Ultra S&P500 (SSO - Free Report) and ProShares UltraPro S&P500 (UPRO - Free Report) if the index is on an uptrend.
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)