The S&P 500's most recent surge to an all-time high is good news for investors. But just a few stocks drove almost half of the rally.
Nine S&P 500 stocks — including Microsoft, Nvidia and Broadcom — added 40% of the market value gained since the index's most recent low on Oct. 27, 2023, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That's a whopping $2.7 trillion generated by just a small group of stocks in just a few months.
This powerful current leg of the rally finally kills the S&P 500 bear market that began on Jan. 3, 2022, says Howard Silverblatt of S&P Dow Jones Indices.
"Since the market bottomed in October of 2022, valuations have been driven higher by three main factors: avoiding a recession in 2023, a Federal Reserve pivot lowering borrowing costs, and higher earnings expectations for 2024," said Rob Swanke, senior equity strategist for Commonwealth Financial Network.
The S&P 500 Bear Killer
Thanks to the surge starting on Oct. 27, 2023, the S&P 500's official start and end dates for the bear market are in the books.
"Similar to a recession, you can only mark a bull or bear market after the event," Silverblatt said. "With today's new closing high, the bear market can be closed, with the start date of Jan. 3, 2022, and the closing high of 4,796.56, and the end date of Oct. 12, 2022, and the closing low of 3,577,03, a 25.4% decline."
That means the bull market started on Oct. 12, 2022, with the closing low of 3,577.03. The bull still lives and has already pushed the S&P 500 up 35.3%.
The Magnificent Seven megacap stocks drove a bulk of the bull's gain. But it turns out they're key players in the surge from last October's lows, too.
Big Market Value Gainers In Surge
AI is clearly a driving force for the S&P's 500 latest move. Microsoft, aggressively adding a "Copilot" to many of its products, is up more than 20% from October 2023's lows. That put more than $500 billion into investors' pockets, accounting for 8% of the rally. Not far behind with a $467 billion gain is Nvidia. Nvidia shares are up 46% from Oct. 27, 2023, on huge demand for its chips.
But what about raw percentage gains in share prices? That award goes to Nvidia rival Advanced Micro Devices. Shares of the chipmaker jumped 80% from the recent Oct. 27 lows. That added $124 billion in market value. And right behind AMD for a percentage gain this year is Builders FirstSource; it's up 62% from Oct. 27, 2023.
Investors keep waiting for new types of companies to propel the S&P 500. But it seems like many of the same winners keep punching over their weight over and over again.
Top S&P 500 Stocks In Surge To High
Created most market value from recent Oct. 27 low
| Company | Ticker | Market value gain (billions) | Sector | % of rally |
|---|---|---|---|---|
| Microsoft | $507.5 | Information Technology | 8.0% | |
| Nvidia | $468.0 | Information Technology | 7.3% | |
| Apple | $332.6 | Information Technology | 5.2% | |
| Alphabet | $293.3 | Communication Services | 4.6% | |
| Amazon.com | $285.0 | Consumer Discretionary | 4.5% | |
| Broadcom | $220.4 | Information Technology | 3.5% | |
| Meta Platforms | $220.3 | Communication Services | 3.5% | |
| Advanced Micro Devices | $124.8 | Information Technology | 2.0% | |
| JPMorgan Chase | $95.8 | Financials | 1.5% |
