Rare S&P 500 surge is an achievement and a warning

Analysts at Deutsche Bank say the S&P 500's rally in April and May was historic: the index rose 16% in two months, a feat seen only four times since 1945. In three previous instances the sharp gains came as the US emerged from recession — after the COVID-19 shock, the Great Financial Crisis, and the first oil shock of the 1970s — and were driven largely by the recovery.

The fourth occurred in January and February 1987 and preceded Black Monday, when the S&P 500 fell more than 20% in a single day. Henry Allen of Deutsche Bank noted that today's rally hasn't followed a recession, and that the only non-recession example since WWII was a few months before a historic market crash.

Talk of a correction has grown as the rally gained momentum, and the bank flagged the jump as one of several market "dislocations" while stocks keep rising against a tide of bearish geopolitical and economic news as the Iran war drags on.

United States

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