Has the Rally Started on Wall Street? Indices are Breaking Records After Records.

Rise of the Dow Jones and S&P 500

American stock markets have surpassed many analysts' negative expectations with their impressive rise this year. The Dow Jones Index closed above 47,000 points for the first time in history last Friday, drawing attention. The lower-than-expected inflation data and the possibility of the Federal Reserve (Fed) cutting interest rates played a significant role in achieving this record level.

Impact of Company Earnings

With the closing on Monday, the Dow Jones Index reached a new record of 47,544 points. The S&P 500 Index has increased by 36% over the past six months, attracting investor interest. This rise is supported by strong company earnings. According to FactSet data, 86% of companies that have reported their third-quarter results in the S&P 500 have exceeded earnings expectations.

Investors' Rise Expectations

Even amid economic uncertainties and geopolitical tensions, analysts express a positive overall outlook for the stock market. Sam Stovall notes that investors are turning to stocks due to "fear of missing out" (FOMO). According to Stovall, the Fed potentially cutting rates two more times and the increasing collaborations in artificial intelligence (AI) support the current momentum in the market.

Risks and Challenges

However, the current market environment is not entirely positive. Bob Doll expresses concerns about signs of weakness in the American labor market and possible declines in consumption. Furthermore, the impact of the earnings reports from major tech companies is becoming increasingly important in the markets. Technology stocks, which account for 41% of the S&P 500's earnings, continue to attract investors' attention.

Market Expectations and Future

Although the stock market maintains its resilience, potential risk factors such as the U.S.-China trade tensions should also be considered in the upcoming period. Keith Lerner believes that potential price declines in such an environment could create buying opportunities. While the upward trend in the markets continues, it seems that temporary fluctuations will not significantly affect investment decisions.