Bull Market Turns Three, More Stocks Have to Join to Keep it Going

Core Insights - The current bull market in US stocks is celebrating its third anniversary, with the S&P 500 Index having increased by 83% since October 12, 2022, adding approximately $28 trillion in market value [2][3] - Historically, bull markets that reach a fourth year average a total gain of 88%, and the current market has achieved this in three years, resulting in a trailing price-to-earnings ratio of 25, the highest for a bull market in its third year [3] Market Performance - The S&P 500 experienced a significant selloff due to President Trump's tariff threats, which caused a drop after an 88% gain prior to the selloff [2][4] - The index's 13% increase over the past year is double the average rise typically seen in the third year of a bull market [2] Future Outlook - There is a debate among market participants regarding whether US stocks have risen too quickly, with concerns about high valuations, tariff issues, and economic uncertainties, especially with the upcoming midterm elections [4] - The upcoming earnings season may introduce volatility, particularly if companies express concerns about growth [5] Concentration of Gains - The rally has been heavily influenced by major technology companies, such as Nvidia Corp. and Meta Platforms Inc., which have seen substantial gains of nearly 1,500% and over 450% respectively over the past three years, while many other stocks have lagged behind [6]