S&P 500 Marks Fourth Anniversary of Bull Market: Nearly 120% Cumulative Gain Over Four Years, Year-End Rally Hinges on Earnings "Shot in the Arm"

The S&P 500 Index today marks the fourth anniversary of this bull market. On October 12, 2022, the index hit its final bear-market closing low of 3,577 points; four years later, that figure has climbed to 7,811 points, a cumulative gain of nearly 120%, more than doubling in four years. Resilient consumer spending and labor market strength, robust earnings growth, and the AI revolution together forged this historic run. MBI Deep Dives points out that the tech landscape is now truly globalized, a handful of companies aggregate demand, and marginal costs are near zero, so concentrated market caps are more like a faithful reflection of where profits flow. Hugo Ferrer, meanwhile, argues that the current deterioration in market breadth stems from higher interest rates rather than concerns about slowing growth, which reduces the severity of that signal. But at the four-year mark, market sentiment is hardly relaxed. The MSCI All Country World Index has stalled since hitting a record in mid-August, with inflation, bond volatility, and AI spending concerns continuing to weigh on risk appetite. JPMorgan and Goldman Sachs kick off third-quarter earnings season on Tuesday, with S&P 500 constituent earnings expected to grow 25% year over year; Citi's model shows the beat rate this quarter will be higher than last quarter, led by tech, healthcare, and mining sectors. Leverage Shares analyst Violeta Todorova says this isn't life-or-death, but it is a "show-me" moment, and the rally needs confirmation because the bar has been raised. "Usually companies just need to step over a lowered bar; this time they have to jump over a higher one." Roundhill Financial CEO Dave Mazza said that merely beating expectations and raising guidance no longer earns a reward; the bar this quarter is to beat, raise guidance, lift full-year guidance, and demonstrate margin durability. AI remains the core AI remains the market's core theme. Market research data shows U.S. AI-related stocks are expected to see third-quarter earnings surge 47%, outperforming all sectors except energy, with the IT sector expected to account for one-third of the S&P 500's total profits this year. In Asia, Taiwanese and South Korean companies are expected to drive a 66% surge in regional earnings growth. But after the MSCI World Information Technology Index rose 31% this year to a record high, the bar for further gains is already very high. Roundhill Financial CEO Dave Mazza said, "Simply beating and raising guidance no longer earns a reward, because that's already expected." "The bar this quarter is: beat, raise guidance, lift full-year guidance, and demonstrate margin durability." Micron Technology beat expectations but investors reacted tepidly, while Samsung Electronics shares fell even after operating profit surged nearly ninefold. Hyperscaler data center spending, meanwhile, is boosting the outlook for grid operators and infrastructure providers. However, surging bond yields have raised concerns about the pace of financing, SpaceX's credit risk indicator hit a new high, and its bonds weakened in the secondary market. Broader growth Investors are also looking for evidence that non-tech sectors can pick up the baton, proving that consumer, industrial, and banking and other more cyclically sensitive sectors are also contributing to profit growth. CG Asset Management portfolio manager Emma Moriarty said, "Watching how these non-tech sectors perform will be especially interesting, as a barometer of the broader economy." Morgan Stanley analysis shows the median Russell 3000 constituent is expected to grow earnings 14% in 2026, with industrials showing solid earnings revisions and declining valuations. Analysts said, "We expect earnings quality, free cash flow, and revision breadth to become key differentiators." Meanwhile, in European markets, the HALO ("heavy assets, low obsolescence risk") strategy is favored, seen as less affected by AI volatility. In Asia, investors are also seeking assurances that earnings growth can extend beyond the tech sector, which has a major impact on the AI supply chain. "Big Short" investor doubles down on bearish bets Pressure on the consumer side continues to show, with rising energy prices feeding through to fuel, and rising bond yields pushing up mortgage, auto loan, and credit card rates. Costco's paid membership growth came in below expectations, and H&M's margins fell significantly. Bank stocks are also under pressure, with the Stoxx 600 banks sector down about 8% over the past two weeks; JPMorgan turned cautious on Southeast Asian banks, warning that surging long-end yields could trigger mark-to-market losses. Just as market divergence intensifies, "Big Short" investor Michael Burry is doubling down on his bearish bets. He said last Sunday that he has concentrated most of his short positions into put options on the Nasdaq 100 Index (NDX) and the VanEck Semiconductor ETF (SMH), expecting a major top within the next nine months. His NDX puts expire in April 2027, and his SMH puts expire in June 2027, both roughly 20% out of the money. In SMH, Nvidia accounts for 19.6%, TSMC 9.3%, AMD 5.6%, and Broadcom, Micron, Marvell, and Applied Materials each about 5%. Burry also continues to hold long-term put options on Oracle and Palantir. Year to date, SMH is up more than 67%, Palantir is up 17.6%, and Oracle is down 26.5%. At the intersection of the bull market's fourth anniversary and earnings season, the market is facing a key test: whether AI profits can be delivered, whether non-tech sectors can pick up the baton, and whether consumers can withstand high interest rates. If earnings are strong, the year-end rally still has fuel; if corporate earnings fail to clear the market's raised bar, Burry's alarm may prove to be more than just noise.