Of the world’s 20 largest stock markets, 14 have hit all-time highs recently. The MSCI ACWI Index, which tracks developed and emerging markets, has been on a record-breaking run, setting another new high on Friday. In the US, the S&P 500 and Nasdaq 100 indexes hit records this week, while the Dow Jones Industrial Average crossed 40,000 for the first time ever. Meanwhile, the biggest bourses in Europe, Canada, Brazil, India, Japan and Australia are currently at or near their peaks.

Looming interest rate cuts, healthy economies and corporate earnings are driving the activity. And what’s more, there are plenty of potential drivers to keep the rally rolling, such as the $6 trillion sitting in money market funds, while risks remain scarce.  

“From a macro perspective, there are no red signals,” said Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, who’s overweight global equities in his multi-asset portfolios. “The cyclical picture is staying strong, and the rally is broadening out.”

The April pullback in global stocks didn’t last long, as dip buyers consistently showed up. That helps explain why the S&P 500 hasn’t seen a 2% drop in 311 days, its longest streak since 2017-2018. And even Chinese equities, which have been struggling since hitting a high in February 2021, are starting to come back.

With all that in mind, here’s the state of play in major equity markets around the world:

$12 Trillion Rally

The S&P 500 has set 24 new all-time highs in 2024 after going two years without one, as US stocks have been on a $12 trillion rally since late October. One part of that is hopes for a soft landing with the economy staying strong while inflation cools, which is spurring bets the Federal Reserve will ease monetary policy as soon as later this year. 

Another part is enthusiasm for artificial intelligence technology. AI chip giant Nvidia Corp. on its own is responsible for about one-fourth of the gains in S&P 500. And together with Microsoft Corp., Amazon.com Inc., Meta Platforms Inc. and Google-parent Alphabet Inc., roughly 53% of the benchmark’s rise is coming from just five stocks.  

So perhaps the Dow’s new milestone this week was the more significant development, since it’s less heavily weighted toward those big tech behemoths, according to Dave Mazza, chief executive officer of Roundhill Investments.

“While the tech sector’s strength has been incredibly important to helping markets make high after high, it’s far from the only sector that’s doing well,” he said. “While some were pointing to the market being too concentrated last year, you can’t say the same in 2024.”

Europe’s Earnings Surprise

European equities are also on a record-hitting spree as economic data shows signs of bottoming amid positive surprises this year. That’s fueling corporate profits and driving expectations for markets to keep building on the rally.

“The expected sluggish earnings season turned out to be better than feared,” BNP Paribas strategists led by Georges Debbas said, noting that three-quarters of European companies met or exceeded earnings expectations, with margins improving. That’s fueling analyst estimates for future profits, lifting stocks higher.

The pan-European Stoxx 600 Index has risen in five of the last six months, with the divergence in monetary policy from the US likely to be a tailwind for the region’s equities. The European Central Bank has struck a more dovish tone than the Fed over the past few months, and bond markets are expecting the ECB to cut rates before its US counterpart for the first time ever.

While the rally had been heavily concentrated in a handful of stocks, it’s been broadening out since February, with 16 stocks contributing 50% of the yearly gains in the Stoxx 600. Novo Nordisk A/S is the largest, making up 10% of the gauge’s returns this year, while ASML Holding NV and SAP SE account for 7.7% and 4.3%, respectively. 

Commodities Lift Stocks

The UK’s FTSE 100 Index has beaten the Euro Stoxx 50 in dollar terms over the past three months, recovering much of its underperformance from the beginning of the year. Soaring commodity prices have been a key driver, helping one of the cheapest developed equity markets in the world start to catch up to its rivals. 

The economically sensitive commodities sector has also pushed to Canada’s main stocks benchmark, the S&P/TSX Composite Index, to an all-time high. Gold and copper have repeatedly set records this year, giving a boost to the country’s massive mining sector, which accounts for over 12% of the index’s weighting. 

“Precious metal prices are closing in on decade highs set just a few weeks ago, which could keep the Canadian index supported for now, though a reversal could spell trouble,” Bloomberg Intelligence analysts Gillian Wolff and Gina Martin Adams wrote in a note. 

Japan Is Back

Japan’s Nikkei 225 is up 16% this year, adding to a 28% gain last year. The country lured investors and drove gains with a campaign to improve shareholder returns, a weak yen and the end of negative rates in Japan.

BlackRock Inc. strategists said the sliding yen could put off foreign investors. But they also think the outlook is good over the long-term due to corporate reforms, domestic investments and wage growth.

India also has been on a strong run, with the benchmark S&P BSE Sensex setting records and outperforming China, thanks to the government’s investment pledges and an expanding economy. However, investors turned cautious in recent weeks over election uncertainties and high valuations.

Meanwhile, Australia’s S&P/ASX 200 Index hit a high on March 28 after inflation data bolstered bets that rates have peaked. Since then, expectations have shifted with a former central bank official predicting that cuts may only come in late 2025. Yet, Australian stocks are back to hovering near that record high