This Rare Market Signal Has Appeared Only 2 Times in a Century. Here Is What History Says Comes Next.
The S&P 500 has continued its march higher.
Overview
The S&P 500 has been a winning bet for investors over the past few years as the bull market roared on -- and continues to advance. The famous benchmark delivered a 78% gain in the three calendar years and is heading for an 11% increase in 2026. Investors have been excited about the potential of artificial intelligence (AI) to transform corporate earnings -- pushing the revenue of many companies significantly higher -- and as a result, have piled into stocks involved in the space. Since many of these players are heavily weighted in the S&P 500, this has pushed the index higher, too.
In this sunny picture, though, a few dark clouds have appeared. Investors have worried about rising inflation, ongoing turmoil in Iran, and even the future AI growth outlook. With tech giants spending nearly $700 billion this year alone on AI infrastructure expansion, some investors have questioned whether the revenue opportunity will make such an enormous investment worthwhile. All of these concerns have prompted the indexes to slip temporarily here and there, but the overall positive performance has continued.
Details
Against this backdrop, a rare market signal has emerged -- one that's only appeared twice in a century. History offers us an idea about what comes next.
Source
Originally published at www.fool.com.