Is the S&P 500 in bubble territory? Or is the U.S. stock market simply so strong that the only viable strategy is to buy every dip? Investors overwhelmingly back the latter view — their persistent buying is powering the S&P 500 to its 33rd record high of the year. Cutting through the noise of government shutdown fears, two major themes continue to dominate: artificial intelligence and Federal Reserve monetary easing.

It's been six months since the S&P 500 bottomed and began its steady climb. The index has gained 35% in that time — a feat that has only happened five times since 1950. Historically, when the index hits a record in September, it has risen an average of 4.8% in the fourth quarter. Investors are all-in on this historical pattern repeating and are exhibiting near-maniacal persistence in buying the dips.

Fear of missing out (FOMO) is so strong in the U.S. equity market that few are paying attention to its relative underperformance compared to emerging markets or Asian exchanges. European equities looked like standouts in the first half of the year, but ultimately, North America regained the upper hand over the long term.

Dynamics of Global Stock Indexes

Regardless of ongoing commentary about stretched valuations or the need to diversify into non-U.S. assets, few are willing to abandon the world's deepest and most liquid market. Investors are well aware of the significance of the AI theme and are willing to stay invested while waiting for tangible earnings to materialize. Case in point: Oracle's razor-thin profits didn't spark a meaningful pullback in the S&P 500. In fact, the company's stock rose after NVIDIA commented that Oracle's AI rival could generate impressive revenue in the foreseeable future.

Despite this steady march upward, the S&P 500 has not experienced a daily move greater than 1% — in either direction — for 31 consecutive trading sessions. That marks the longest streak of its kind since the COVID-19 pandemic. This low-volatility rally reflects a market in which uncertainty around AI technology, an extended government shutdown, and a lack of fresh economic data elevate the importance of events like Fed speeches or FOMC minutes.

At the latest meeting, Federal Reserve officials reaffirmed their readiness to continue cutting interest rates in response to mounting risks in the labor market. Some believe the shutdown may force the Fed to "fly blind" — cutting rates without critical supporting data. Historical evidence from past U.S. government shutdowns indicates slowed GDP growth and increased job losses.

In my view, the U.S. stock market will continue its upward trajectory, finding fresh bullish catalysts along the way. That could include a resolution to the shutdown, a nearing Fed rate cut, or positive ripple effects from Donald Trump's sweeping tax reform legislation.

Technical Picture

Technically, on the S&P 500 daily chart, the rally persists toward previously stated targets at 6800 and 6920. It makes sense to remain in the buyers' camp. The trend remains intact, and until clear signs of exhaustion emerge, dips continue to be buying opportunities in what remains one of the world's most resilient bull markets.