The current bull market in U.S. stocks is demonstrating historic strength. The S&P 500 index has risen 95% from its lows in late 2022, entering the top ten most powerful rallies since 1928.
This impressive growth places it in the top 10% of all bull markets over nearly a century of observation. For comparison, the median result of a bull market after 3.5 years is about 35%, while the top 25% gain around 50%. The current growth represents exceptional momentum, standing out even considering the correction in March-April 2025.
Momentum Strength and Record Rebound
The rebound from the April 2025 low was particularly sharp — the S&P 500 surged 51% in a short period. This indicates incredibly strong momentum, which, however, carries risks of overheating. We are witnessing a classic late-stage bull market, where capital concentration in a narrow range of stocks and extreme valuations become the norm.
Parallels with the Dot-Com Bubble
Amid this rally, voices of analysts drawing parallels with the 2000 dot-com crash are growing louder. One of them, an analyst under the pseudonym Qmo, overlayed the dot-com crisis chart onto the current S&P 500 dynamics and found an almost perfect match. According to him, the market is repeating the same structure week after week: a sharp surge, a pullback, a first correction, a weak recovery, and preparation for a real collapse.
Recall that during the dot-com crash, the S&P 500 fell by about 49%, and the Nasdaq by nearly 78%. The decline lasted over two years. Qmo emphasizes that he does not expect a literal repeat of the scenario, but ignoring such a close structural match is dangerous.
Two Sides of the Same Coin
Experts at The Kobeissi Letter note powerful momentum, while Qmo sees in the same unrestrained strength and high valuations the classic signs of a late-stage bubble. This is not a contradiction but a characteristic of an overheated market: the longer the rally lasts, the more acute the question of its sustainability becomes.
My view: The market is currently in a zone of extreme uncertainty. On one hand, record growth and strong momentum attract new buyers. On the other, historical parallels and overvaluation point to a high risk of a reversal. Investors should exercise maximum caution and diversify risks, as the current dynamics resemble the final stage of a bull cycle, where the reward for entry is coupled with potentially catastrophic losses.