Bull Market Turns Four as AI Spending Sustains Rally, But Yields Pose Risk

What’s happening

The S&P 500 bull market approaches its fourth anniversary next week, driven primarily by artificial intelligence spending and tech sector dominance. Historical data shows bull markets that survive past their fourth year rarely collapse, but rising bond yields and energy prices are creating headwinds.

Market impact

Tech and AI-adjacent equities remain bid, but rotation risk is real if yields spike further or inflation data surprises to the upside. Earnings season this week from major banks will test whether corporate profitability can justify current valuations amid higher financing costs.

Broader implications

The rally's longevity depends on sustained AI capex and moderating interest rates. Any shock to either—whether from geopolitical escalation, inflation reacceleration, or slowing corporate investment—could trigger a meaningful correction after four years of gains.