S&P 500 Gains 117 Percent as AI Drives Bull Market

The S&P 500 is approaching the four-year anniversary of a bull run that began after a closing low on October 12, 2022. The index has gained 117 percent during this period, marking the sixth-best-performing bull market since World War Two.

Corporate spending on data centers and artificial intelligence infrastructure drove the rally. Oxford Economics estimates that AI accounts for approximately one-third of recent U.S. economic growth. Nvidia became the world's largest company by market value, reaching $5.8 trillion, as a central figure in this trend.

Analysts warn of concentration risks because the top 10 companies in the S&P 500 now comprise about 40 percent of the index. Other potential headwinds include spiking U.S. Treasury yields, interest rate hikes from the Federal Reserve, and volatility linked to the upcoming U.S. midterm elections.