The U.S. bull market marked its fourth anniversary on Monday, October 12, with the S&P 500 up nearly 120% from its October 12, 2022 closing low. Investment tied to artificial intelligence has been a major driver, but rising bond yields, persistent inflation concerns and a more hawkish Federal Reserve are putting the rally’s prospects for a fifth year under scrutiny.
AI investment has helped lift the S&P 500 nearly 120%
Since ChatGPT’s launch in late 2022, investor attention has increasingly focused on the AI supply chain. Shares in companies supplying essential equipment for data centers and AI infrastructure have climbed sharply, helping support the bull market over the past four years.
Nvidia has become a defining name in the rally. Once best known for high-end gaming graphics cards, the company now has a market capitalization of about $5.5 trillion; it first crossed the $1 trillion mark in 2023. Micron Technology, another beneficiary of AI demand, reached a $1 trillion market value for the first time in May 2026.
The S&P 500 broke above 7,800 for the first time last week and remains near record levels. Technology stocks account for about 40% of the index, making the performance of large tech companies a powerful influence on the broader market. That concentration has sharpened attention on whether AI-related businesses can deliver on increasingly ambitious earnings expectations.
Historical cycle data points to 2027, but offers no timetable
Ari Wald, technical analyst at Oppenheimer, said the current bull market ranks sixth in duration among the 24 cycles recorded since 1932. Historically, the median time from the current stage of a bull market to its peak has been 13 months. If that pattern holds, 2027 could mark the final stretch of the rally.
That median is not a prediction of when the market will turn. Wald also noted that the median return in the fifth year of a bull market is 21%, suggesting further gains remain possible even after a lengthy advance. Cycle length is only one reference point; market performance will also depend on corporate earnings, interest rates and investor participation.
Narrower market breadth puts small caps in focus
The rally’s internal breadth is another concern. In September, 75% of S&P 500 constituents fell. Worries that interest rates could keep rising have encouraged investors to favor a smaller group of large companies, leaving the market’s advance increasingly dependent on mega-cap stocks rather than broad participation.
Small-cap shares have been particularly weak. Wald said he is watching the Russell 2000’s test of its 200-day moving average to gauge whether the bull market has room to continue. Until market conditions improve, he views small caps’ relative weakness as a warning sign rather than a buying opportunity.
Third-quarter earnings face elevated expectations
Third-quarter results are expected to be strong overall, but some investors question whether earnings growth will be enough to push share prices higher. With expectations already elevated, companies’ ability to beat forecasts will shape views on valuations and potential returns from here.
Deutsche Bank strategist Parag Thatte said the shift of capital into technology may have gone too far, leaving the sector with a less attractive risk-reward profile than before. Others argue that the market’s resilience over the past four years reflects support from corporate fundamentals and earnings tied to AI infrastructure investment. The challenge, however, may be identifying companies that can sustain growth without disappointing on results.
Adam Parker, founder of Trivariate Research, said investors seeking to outperform need to own faster-growing companies that can meet expectations. He remains positive on the U.S. stock market overall. As the bull market enters its fifth year, investors are weighing earnings delivery, the concentration of gains in technology stocks and whether the advance can spread to a wider range of companies.