US stock bull market marks 4th anniversary, boosted by AI but facing high concentration risk

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Summary · why it matters

The US stock market is about to mark the 4th anniversary of its bull market on October 12, with the S&P 500 trading near a record high and up 117% from its cycle low on October 12, 2022. Ryan Detrick, chief market strategist at Carson Group, said this bull market is the 8th longest since the end of World War II and ranks 6th in returns among bull markets since then. The main driver has been investment in artificial intelligence, or AI, with companies in the S&P 500 expected to post combined profit growth of more than 35% this year, and Oxford Economics estimates that nearly one-third of US economic growth has come from AI. However, concentration risk is rising: the 10 largest companies by market value in the S&P 500 have seen their combined share rise from about 28% in October 2022 to roughly 40% now. Meanwhile, Nvidia, a key AI chipmaker, has seen its market value surge from 286 billion dollars to 5.8 trillion dollars, making it the world's most valuable company. Currently, 13 US companies have a market value of at least 1 trillion dollars each, with only 2 of them not in the technology sector or without significant AI-related businesses. In addition, the market faces pressure from the 10-year US Treasury yield, which is hovering around 5.2% after recently hitting a 24-year high. Angelo Kourkafas, senior global investment strategist at Edward Jones, said the firm remains overweight equities relative to its benchmark but has shifted its recommendation to more caution, as fixed income is becoming more attractive.

Impact on assets 2

Artificial Intelligence▲
NVIDIA Corporation
NVDA
▲ PositiveDemandrelevance

Nvidia's market value surged from $286B to $5.8T as the key AI chipmaker driving the bull market's AI investment boom.

Others▼

Off-coverage companies 1

Oxford Economicsi
Private± Mixedrelevance