Bank of America: US stocks are approaching a fourth consecutive year of double-digit gains, with material stocks expected to become the next strong sector.

The team led by Michael Hartnett of Bank of America stated that the US stock market is on its way to recording double-digit gains for the fourth consecutive year, a rare phenomenon that has only occurred a few times in history. The S&P 500 index currently corresponds to an annualized gain of about 20%. This sustained bull market has only occurred during World War II, the post-war years of peace, and the bubble phase from 1995 to 1999. The latest surge in the stock market, driven by the AI capital expenditure frenzy, has further pushed up the market, but the increase is very narrow. Now, other sectors are also starting to show stronger gains. Hartnett and his team believe that, supported by the resilience of the US economy, small caps, emerging markets, and commodities "are all experiencing a turning point in a long-term bull market". The Bank of America team predicts that the materials sector will be the next strong sector to rise. Although this sector currently only accounts for 2% of the S&P 500 index, nearing a 30-year low, this situation is expected to change. Geopolitical competition surrounding resources, increased military spending, the AI capital expenditure boom, and efforts to address housing shortages will make the materials sector a "new star of the bull market".