Nvidia and Micron Have Driven the S&P 500’s 2026 Rally to Record Highs. History Says It’s Not Over

The S&P 500 doesn't look to cognize however to halt climbing. As of Tuesday's close, the scale had notched 25 all-time highs successful 2026 alone, according to Bloomberg Terminal information -- pursuing 39 past twelvemonth and 57 successful 2024. For semipermanent investors, the existent situation isn't spotting the adjacent record. It's figuring retired what to bash erstwhile you've stopped being amazed by them.

A Rally That Keeps Setting Records

Second-quarter net are connected gait to turn 29% year-over-year, Bloomberg Opinion's Jonathan Levin notes, and analysts are raising their 12-month EPS estimates astatine a gait helium calls unusually fast. That net spot is showing up successful returns: the S&P 500 is up 13.7% connected a total-return ground done August 7 -- the seventh-best commencement to a twelvemonth successful 33 years. 

That's notable for different reason. Back-to-back double-digit gains aren't uncommon exactly, but 20%-plus back-to-back years are: 2023's 26.3% and 2024's 25.0% marked the archetypal clip that had happened successful 2 and a fractional decades. Add 2025's 17.9% full return, and the scale has present logged 3 consecutive double-digit years — and a 4th is good wrong reach.

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That said, 3 consecutive double-digit years isn't the aforesaid arsenic 3 consecutive inexpensive years. The S&P 500's guardant price-to-earnings ratio has climbed alongside the scale itself, which means a increasing stock of these gains is coming from investors paying much for each dollar of expected net -- not conscionable from the net themselves. That's not a reddish emblem connected its own. It's a reminder that the net maturation Levin points to needs to support showing up, oregon the aggregate enlargement that's fueled portion of this tally could reverse conscionable arsenic quickly.

Two Stocks, One Outsized Push

Much of 2026's ascent traces backmost to 2 companies punching good supra their scale weight.