U.s. Stocks Are Back to Record Highs. Is It Too Late to Chase the Bull Market?

For the first time in nearly a month, the S&P 500 closed at a fresh high on Tuesday, raising questions for investors who have kept their portfolios on the sidelines. Many may be wondering whether they have missed the opportunity to enter the market or if it is still a good time to invest.

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Following two years of substantial gains, it is natural for investors to consider whether they should jump in now or wait for a potential pullback. As the saying on Wall Street goes, “trees don’t grow to the sky,” reminding market participants that stocks don’t rise indefinitely in a straight line.

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Reaching new market highs can influence investor sentiment, but historically, such milestones are not particularly unusual. According to data from Ryan Detrick, chief market strategist at Carson Group, the S&P 500 has, on average, reached a record high every three weeks since its inception in 1957.

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This does not mean the market has been immune to downturns. Prolonged periods of losses have occurred, but bear markets remain relatively infrequent. Investors who wait for a correction before entering the market often miss out on potential gains.

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One common question Detrick encounters is whether investors should buy stocks at all-time highs. In a post on X, he emphasized that history suggests investors shouldn’t fear new highs. He pointed out that a year after hitting an all-time high, the S&P 500 has risen 71% of the time, delivering a median return of 8.3%—which aligns with typical stock market gains.

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However, this pattern is not absolute. For example, on January 3, 2022, the S&P 500 reached a record high of 4,796.56 before tumbling 25% to its lowest point in October of the same year. It ultimately took more than two years for the index to recover and surpass that previous peak.

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That said, bear markets like the one in 2022 tend to be exceptions rather than the rule. Over extended periods, stocks generally trend higher, a pattern that has been especially evident since the recovery from the 2008 financial crisis began in early 2009.

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Still, investors considering entering the market now should take certain risks into account.

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In recent months, new potential challenges have emerged, some of which could disrupt the market’s momentum. These risks have surfaced at a particularly delicate time, given that large-cap stock valuations remain high by historical standards. Additionally, seasonal trends suggest that the first quarter of a new presidential term is typically one of the weakest in the four-year cycle, according to Detrick.

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One notable development is the emergence of China’s DeepSeek artificial-intelligence program, which has raised concerns about America’s dominance in AI. Meanwhile, former President Donald Trump’s unpredictable trade policies have injected uncertainty into markets, creating the potential for volatility. Additionally, government job cuts under the new administration have sparked concerns about the resilience of the U.S. labor market.

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Another factor weighing on investor sentiment is the Federal Reserve’s decision to pause its anticipated interest rate cuts. On a more unconventional note, the Philadelphia Eagles’ Super Bowl victory may seem unrelated to market performance, but history suggests that their wins have often coincided with economic or financial market turbulence.

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So far, investors have largely brushed off these concerns. However, just because these risks haven’t triggered a market downturn doesn’t mean they won’t in the future.

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The group of dominant technology stocks known as the “Magnificent Seven” has struggled since the beginning of 2025, but the broader market has continued to rise as other stocks have stepped in to sustain the rally. This suggests that the market’s upward momentum is now less reliant on a handful of large-cap stocks, making it theoretically more resilient to individual stock fluctuations.

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That does not mean the concentration of gains within a few mega-cap stocks is no longer a concern. For example, in late January, Nvidia shares plunged 17% in a single session, dragging the S&P 500 down nearly 1.5%—even though more than 350 of the index’s other components posted gains.

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The underperformance of the Magnificent Seven has contributed to a deceleration in the S&P 500’s rally since the start of 2025. However, analysts such as Detrick argue that stronger performance from smaller stocks suggests that the rally is now built on a firmer foundation. As of midday Wednesday, the index had climbed 4.2% year to date. Meanwhile, the Invesco S&P 500 Equal Weight exchange-traded fund (RSP), which provides a more balanced view of the market’s average stock performance, had risen 4%, according to FactSet data.

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Reflecting on market history, February 19, 2020, marked the S&P 500’s final record close before the COVID-19 pandemic upended global financial markets. Since then, the index has surged more than 80%, per FactSet data. By late summer 2020, all the losses from the pandemic-induced selloff had been fully recovered.

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On Wednesday, U.S. stocks were trending lower in intraday trading. The S&P 500 was down six points, or 0.1%, at 6,122, while the Nasdaq Composite had slipped 53 points, or 0.3%, to 19,990. Meanwhile, the Dow Jones Industrial Average declined by 144 points, or 0.3%, to 44,413.

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