Four years in, $40 trillion up: Why this AI-fueled bull market has room to run

The bull market nobody saw coming turns four years old this week, powered by an artificial-intelligence boom that has created trillions of dollars in new investor value, launched a game-changing drive to develop new technology, and raised big questions about the risks of a bubble that could tear the rally down at a moment’s notice.

The S&P 500 bottomed out from a vicious bear market in October 2022, when it tumbled nearly 25% from its prior peak following Russia’s invasion of Ukraine, which prompted a global surge in oil prices. Investors were also contending with a Federal Reserve intent on normalizing interest rates after the central bank made emergency cuts tied to the Covid pandemic.

Its Oct. 12, 2022, close of 3,577.03 points, however, marked the start of a relentless bull run that has produced 123 new closing highs, added nearly $40 trillion in overall market value, and helped spur four tech giants—Nvidia, Microsoft, Apple, and Google parent Alphabet—to each have market capitalizations of at least $4 trillion.

And it may have only reached the halfway point.

Carson Group’s chief market strategist, Ryan Dietrick, writes that of the five major bull markets of the past half-century that have powered into a fourth year, all have made it to a fifth. In fact, the average length of a bull market is normally eight years.

“We aren’t saying this bull is only halfway over, but we are saying to be open to this one lasting a lot longer,” he said in a note to clients.

The S&P 500 has risen nearly 120% over the past four years—with the Nasdaq Composite surging more than 165% in the same period—as part of a tech-led bull market that few saw coming when it began to gather steam in the autumn of 2022.

The market got a jolt in November of that year, when OpenAI launched its ChatGPT chatbot—a debut that helped spur a multi-trillion-dollar AI investment race that has transformed markets and realigned the global economy.

But some of the early signals are positive.