Despite the worst start to the year in history for U.S. stocks, the benchmark S&P 500 .SPX index rallied to a record intraday high on Monday, surpassing the previous intraday peak set on May 20, 2015.
It if ends the day above 2,130.82 on Monday, the S&P 500 index will close at a record, confirming a rally that started on March 10, 2009 as the second-longest bull market in the index’s history. In early trading, it was at 2,135.68, above the May 20, 2015 intraday high of 2,134.72.
To the surprise of many, the latest all-time high has come more than a year after U.S. stock prices peaked and after the market has withstood several consecutive quarters of contracting U.S. corporate earnings and global market volatility.
Declining earnings, stagnant overseas economic growth, a plunge in oil prices, negative interest rates in some countries, the threat of interest rate increases from the U.S. Federal Reserve and a recent spate of panic selling following Britain’s vote to withdraw from the European Union have all undermined the bull market in the past year.
Investors opened 2016 with concerns about Chinese economic weakness, a free fall in oil prices and fears of global recession.
By early February, the S&P 500 index was down 15 percent from its highs, and traders were talking about the possibility of a bear market, traditionally defined as a 20 percent fall from their highs.
“When you look at the first five months of the year it has been an emotional roller coaster that has been beset with investor cognitive errors, most glaring of which was discounting the recession that never happened in January and February,” said Julian Emanuel, equity strategist at UBS in New York.
U.S. stock prices fell to 3-1/2 month lows on June 27, as the surprise vote by United Kingdom voters to withdraw from the European Union, or Brexit, brought about another wave of uncertainty for investors, before the recent rally of nearly 7.0 percent.