We’ve officially reached the halfway mark of the year—and what a year it’s been so far! The stock market is currently enjoying a period of extraordinary success, with major indices repeatedly reaching new all-time highs.

As an example, the S&P 500 rose above the 5,500 level for the first time ever in mid-June, and the index is now up about 15% year to date.

The NASDAQ’s performance has been even more impressive this year, with the index rallying nearly 18% higher. The NASDAQ also broke through to new all-time highs, surpassing 17,930 in mid-June.

The Dow’s performance has been a bit more volatile this year, as every foray into new highs territory is met with resistance. Still, the Dow rose above 40,000 for the first time ever in late-May.

What’s behind the overall stock market’s strength this year? I’ll be giving an exclusive presentation to Trading Desk subscribers soon with my thoughts . . . watch your email for the invitation. But as a teaser, I have to say it boils down to
robust investor confidence.

The walls of worry simply no longer have much sway over Wall Street. And the wave can roll for a surprisingly long time . . . only 60% of the S&P 500 and barely 35% of the smaller-cap Russell 2000 have joined the party YTD. When they catch up, the gains will firm up.

There are also several key factors that have contributed to this market euphoria, including a surprisingly strong economy, moderating inflation, trust in the Federal Reserve’s ability to manage economic challenges, and impressive corporate profits.

All these factors have combined to create a fertile ground for stock market growth—and the great news is that these factors should continue to drive the bull forward in the second half of the year.

The stock market’s ascent to record highs in the first six months of the year was incredible, and I know many investors are concerned whether this run can last.

There are always factors that could lead to a reversal of fortune, such as overly restrictive monetary policy or elevated valuations. Simply put, there are always risks to investing. But if we’re vigilant and flexible as the market continues to evolve, we can find successful trades in any market environment.

In my opinion, the forces that were at work in the first six months of the year that drove the market to new heights will remain in effect in the near term. And that means the market could continue to break through to new all-time high after new all-time high in the second half of the year.

How are you feeling? Let me know! And keep your eye out for that invitation to my 2H Outlook reveal.