2. Valuations don’t look like a classic bubble

Comparisons to the market’s dot-com era are common whenever technology stocks lead the market to new heights. Today’s backdrop looks different.

The S&P 500 Index trades at roughly 20 times projected 2026 earnings, while the equal-weighted S&P 500 trades around 18 times earnings. By comparison, at the peak of the late dot-com era, the largest technology firms in the S&P 500 traded at more than 125 times their estimated earnings. Even valuations on the shares of the mega-cap “Magnificent 7” technology leaders appear reasonable given the group’s substantial earnings growth.

“For now, earnings have been growing so strongly that it’s hard to call this a bubble,” says Jurrien Timmer, director of global macro at Fidelity. “Bubbles have been about excessive valuations and a lack of earnings growth. So far, we don’t have either, which is why I’m not yet alarmed.”

That doesn’t mean stocks have been cheap, but by historical standards, current valuations appear more grounded in fundamentals.

3. The earnings cycle may be younger than many realize

Despite years of strong market performance, Chisholm argues that the broader corporate earnings cycle may still be at a relatively early stage. While index-level profits have surged in recent years, much of that growth has been concentrated among a relatively small group of large companies.

Median corporate earnings remain below the previous peak reached in 2018, suggesting many companies have been working through a longer recovery period following the pandemic and its economic disruptions.

“It’s been 7 years, and we really haven’t gone anywhere in terms of earnings growth on a median basis,” Chisholm says.

Historically, earnings cycles that take longer to recover have often lasted longer once new highs are reached. If that pattern holds, this bull market could potentially endure.

“Once you get back to prior market peaks, the cycle on average has lasted another 4 years,” Chisholm says.

4. Consumers continue to drive the economy

Consumer spending accounts for roughly 70% of US economic activity, making household finances an important indicator for investors.

Although many Americans remain frustrated by higher prices and the cumulative effects of inflation, spending has remained resilient thanks to a relatively stable job market. The result is an economy that has continued to expand despite broad, persistent pessimism.

“The US is in the middle of an ongoing expansion, which can last for some time,” Malwal says. “It’s a good economy that doesn’t feel good. And though consumers have struggled with rising prices, their spending growth continues to rise. This may support further US economic growth.”

If consumers remain employed and continue spending, the broader economic expansion could help support earnings growth across a wide range of industries.

5. Investors remain skeptical even as they spend

Many investors remain uneasy about stocks, even after years of gains.

Concerns about inflation, geopolitical tensions, energy prices, tariffs, and the possibility of a market pullback continue to weigh on sentiment. Yet from a market perspective, lingering skepticism may actually be constructive.