The breadth and coverage of the rising trend in the US stock market have significantly expanded - that is, more and more individual stocks are following suit.$S&P 500 Index (.SPX.US)$Joining the record-breaking stock rally has alleviated investors' concerns about the trend in US stocks being concentrated on a few large tech stocks for most of 2024. With the latest unexpectedly revised GDP growth rate, along with the basic compliance of initial jobless claims in recent weeks and a cooling-off trend, coupled with persistently declining inflation, the broadening of the US stock rally highlights the global optimism in pricing for the imminent 'soft landing' of the US economy. This bullish sentiment is expected to drive the S&P 500 index to touch the epic 6000-point mark before the year's end.

The benchmark index of the US stock market - the weighted version of the S&P 500 index is expected to rise by about 5% in the third quarter ending on Monday. However, this time, compared to the previous quarters where the 'Magnificent 7' (seven major tech giants) with high weightages led the index rebound, this time the unexpected 50 basis point rate cut by the Fed to promote an optimistic sentiment for achieving a 'soft landing' in the economy, driving investors to invest in regional banks, biomedical, traditional industrial companies, and other stocks benefiting from economic resilience and low-interest rates, as well as the aforementioned tech giants that have already risen significantly this year.

So far this quarter, over 60% of the constituent stocks in the S&P 500 index have outperformed the index, compared to only about 25% in the first half of the year.

At the same time, the equal-weighted version of the representative index stock, the S&P 500 index ( $Invesco Exchange Traded Fd Tr S&P 500 Equal Weight Etf (RSP.US)$ So far this quarter, the increase has reached 9%, showing a rare outperformance compared to the market capitalization-weighted S&P 500 Index—the weighted version of this index is the market benchmark reference point, mainly influenced by the weights of the "Magnificent 7."$NVIDIA (NVDA.US)$and $Apple (AAPL.US)$ The equal-weighted S&P 500 Index outperforms the weighted version, which is also a significant sign of the market pricing in a "soft landing" for the US economy. Investors anticipate that all industries will benefit from the Fed's interest rate cuts and a soft landing, leading to full recovery.

Wall Street investment institutions have expressed that the expanded breadth of the US stock market is an encouraging sign for market sentiment. Previously, there were concerns that if the tech giants supporting the US stock market were no longer in favor, the US stock market might face a major turnaround - a shift towards a rapid decline or bear market.

During this weekend and the start of the new round of usa stock earnings season in October, job data and financial reports from key companies in the s&p 500 index will test whether the logic of the 'soft landing' in the usa economy is smooth, which is crucial for the us stock market and even the global stock market.

Kevin Gordon, Senior Investment Strategist at Charles Schwab, a wall street investment institution, stated: 'The situation in the second half of this year is almost completely opposite to the first half. Even if the contribution of tech giants and other large market-cap stocks is not significant, I think as long as other component stocks perform well overall, it is a very healthy trend.'

Earlier this month, the Federal Reserve began its first rate-cutting cycle in four years, cutting rates by 50 basis points more than expected. Federal Reserve Chairman Jerome Powell stated that this move aims to protect the resilience of the us economy, with the purpose of 'preventive' rate cuts, not driven by recession. According to LSEG's statistics, an increasing number of interest rate futures traders expect the Fed to announce another significant 50 basis point rate cut at the November rate decision meeting - the probability is around 50%, and it is expected that the Fed will cut rates by over 200 basis points by the end of 2025.

In the us stock market, almost every corner benefits from the prospect of low rates and the expectation of a 'soft landing.'

Investors generally believe that the two most sensitive sectors of the US economy - the industrial and financial sectors of the s&p 500 index, rose by around 10.6% and 10% respectively in the third quarter, far outperforming the market cap-weighted version of the s&p 500 index.

The decline in interest rates has also significantly boosted the stock prices of small and medium-sized companies, as these companies' stock prices have long been severely affected by high interest rates on a long-term basis. With the boost from the Fed's initiation of an interest rate cutting cycle, primarily benefiting small-cap stocks,$Russell 2000 Index (.RUT.US)$finally, an opportunity for a rebound has arrived, with the index rising nearly 9% so far this quarter.

As us treasury yields and rates decline, considered the 'fixed income bond agents' of the stock market - stocks with strong dividends, also benefit from the Fed's rate-cutting cycle, attracting many investors seeking fixed dividend income. The utility and consumer staples sectors of the s&p 500 index have risen by 18% and 8% respectively this quarter.

Mark Hackett, Director of Investment Research at Nationwide, stated that this broadening trend in the market occurred before the Federal Reserve rate decision on September 17th and 18th. 'We have recently seen a larger allocation across various industries, and the performance levels of various sectors have rebounded, then the Fed took more aggressive rate-cutting measures, ultimately accelerating this trend.'

Overall, in the 11 component sectors of the S&P 500 index, 7 sectors outperformed the weighted version of the index in the third quarter. In contrast, only the technology and communication sectors - including $Alphabet-A (GOOGL.US)$ and the owner of Facebook$Meta Platforms (META.US)$ , outperformed the S&P 500 index in the first half of this year.

The s&p 500 index has increased by more than 20% year to date, continuously reaching historic highs, continuing the bullish market trend that started in 2023.

At the same time, the overall impact of large technology giants has diminished. According to LSEG data, the combined weight of the 'Magnificent 7' (seven major tech giants) in the S&P 500 index - namely $Apple (AAPL.US)$N/A.$Microsoft (MSFT.US)$and$NVIDIA (NVDA.US)$N/A.$Amazon (AMZN.US)$and$Alphabet-A (GOOGL.US)$Please use your Futubull account to access the feature.$Meta Platforms (META.US)$And$Tesla (TSLA.US)$the weight ratio decreased slightly from 34% in mid-July to 31%.

John Li, Chief Strategist at BakerAvenue Wealth Management, said: "I believe a certain level of stability and decline in the tech industry is quite healthy." "In any case, we are not in a tech bear market, but you are definitely seeing some classic rotation signs."

Market expectations for a "soft landing" scenario continue to strengthen.

Looking ahead to the future of the US stock market, investors may need to see further economic strength data to choose to continuously invest in the US stock market. The non-farm payroll data released on October 4 will be a test for the soft landing scenario, with the previous two employment reports coming in lower than expected. However, many investors undoubtedly hope for a slightly higher-than-expected September non-farm payroll, to further reinforce the logic of a soft landing in the US economy.

Market participants also hope to see strong profit data from non-technology companies in the s&p 500 index in the coming months to prove the rationale behind their recent stock price surges and to validate the logic of a soft landing.

Takinde Dillon, Senior Research Analyst at LSEG, predicts that earnings of the seven major tech giants in the third quarter will increase by about 20%, while profits of the rest of the companies in the s&p 500 index will grow by 2.5%. It is expected that by 2025, this gap will significantly narrow, with annual profits of the remaining component stocks of the index expected to grow by 14%, while the seven major tech giants are expected to grow by 19%.

Lisa Shalett, Chief Investment Officer of Morgan Stanley Wealth Management, stated in a recent report that on the grand stage of the US economy achieving a 'soft landing,' the seven tech giants 'should not shoulder profit rebound alone. We are currently in the 'showcase' phase of the soft landing.'

Driven by the logic of 'soft landing,' will the S&P 500 index head straight to 6000 points this year?

Tony Roth, Chief Investment Officer of Wilmington Trust, stated: 'Considering the trend of the US economy, if the rate continues to increase at a pace of 25 basis points, we believe that the risk of an economic recession next year may increase.' Nevertheless, he still believes that the S&P 500 index will reach an astonishing 6000 points by the end of the year. 'As people increasingly recognize the logic of a soft landing for the US economy, funds will continue to pour into the US stock market.' In contrast, the S&P 500 index closed at 5738.17 points last Friday.

Ed Yardeni, the Wall Street veteran who has steadfastly held a bullish outlook on the US stock market for a long time and the founder of the renowned investment firm Yardeni Research, recently stated in an interview that due to the unexpected 50-basis-point interest rate cut by the Federal Reserve last week initiating a loose monetary policy, the US stock market may experience a 'melt-up' trend due to rapid easing - a market frenzy trend of continuous soaring to reach historical highs, eventually leading to a scenario similar to the late 1990s internet bubble.

This Wall Street veteran predicts that with the Federal Reserve cutting rates by 50 basis points to initiate a loose monetary policy, the S&P 500 index has a high probability of climbing above 6000 points by the end of the year.

6000 points - a once (at least in 2023 full year) shocking and seemingly radical index forecast, now as the S&P 500 index continues to hit new highs, is aligning with the latest bullish forecasts of many Wall Street strategists. They steadily raise their bullish outlook for the US stock market to keep up with the S&P 500 index's bull market surge of up to 20% this year.

Global top investment institution BMO Capital Markets has the highest forecast for the s&p 500 index, reaching as high as 6100 points, ranking second is another investment institution Evercore ISI, which expects the s&p 500 index to close at 6000 points by the end of the year, and predicts that the ai investment boom may continue to boost the US stock market to 7000 points in 2025.

As the US stock market continues to hit new all-time highs, Oppenheimer's technical analysis team from Wall Street believes that there are hardly any signs indicating an imminent market peak. The institution finds encouragement in the statistical fact that over 60% of stocks on the nyse have risen above the 200-day moving average, which is a healthy bullish sign for the market as it indicates that the market's rise is driven not only by a few large technology companies including Apple, Nvidia, and Microsoft.

"If the current US stock bull market follows historical average levels, the US stock market may continue to rise until the end of 2025, with the s&p 500 index reaching around 7000 points." Oppenheimer stated in a recent bullish trend research report on the US stock market.

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