The current bull market, which began in October 2022, has shown impressive gains of approximately 63% for the S&P 5001. Historically, bull markets have averaged returns of 152%, suggesting potential for further growth2. The duration of bull markets has varied significantly, with some lasting over a decade, like the 12-year run starting in 1987 and the 11-year stretch beginning in 20092. On average, post-World War II bull markets have lasted about 4.5 years2.

• The current bull market is still relatively young at two years old1.

• Seven out of 13 bull markets since World War II have lasted three years or more2.

• Longer bull markets tend to generate higher returns, with the 1987 and 2009 bulls yielding 582% and 400% respectively2.

• The S&P 500's average annual return since 1957 has been about 10.5%, providing context for long-term performance3.

The Federal Reserve's recent interest rate cuts have had a significant impact on the S&P 500's performance. Historically, the index has shown mixed reactions to rate cuts, with performance varying based on economic conditions. According to a Bank of America analysis, the S&P 500 has returned an average of 11% in the 12 months following the first rate cut of an easing cycle since 1974, slightly below its long-term average since the 1970s of 12% per year1.

• When rate cuts coincide with soft landings rather than recessions, the S&P 500's average 12-month return jumps to nearly 21%1.

• Low interest rates typically boost stock prices by making stocks more attractive compared to bonds and reducing borrowing costs for companies2.

• However, rate cuts can also signal economic concerns, which may lead to market volatility1.

• The current market environment, characterized by AI-driven growth and easing inflation, has created optimism among investors despite initial rate cut jitters13.

The artificial intelligence (AI) boom has been a major driver of recent stock market gains, particularly benefiting tech companies like Nvidia. The S&P 500 has seen significant growth, with analysts predicting it could reach 6,000 by year-end amid the AI surge and strong corporate earnings1. Nvidia's market value surpassed $3 trillion in 2024, fueled by the generative AI boom and rebounding tech sector2.

Key points:

• AI-related stocks have propelled the S&P 500 and Nasdaq to record highs1

• The overall AI semiconductor market is projected to reach $168 billion by year-end1

• Tech and AI companies are expected to exceed expectations for the September quarter1

• However, high valuations and market concentration in a few large tech stocks pose potential risks3

• Analysts suggest diversifying exposure to smaller tech companies and other sectors that may benefit from AI advancements3