The S&P 500 Momentum Index, which tracks stocks with the strongest recent price trends, has ripped 32% higher over two months. That’s the best performance in the index’s history.
April alone accounted for a 19.3% return, making it the single strongest month on record. The move was fueled almost entirely by mega-cap AI stocks, dragging the rest of the market upward.
The Nasdaq Composite surged 25% during April and May, its best two-month stretch since late 2002. The S&P 500 added over $9.5 trillion in market capitalization and hit 14 record highs in a single month.
Goldman Sachs’ own Momentum Factor climbed 25% over three months, with the bank flagging it as a historic rally. Hedge fund exposure to momentum trades is now approaching five-year highs.
On the global stage, the MSCI global momentum index outperformed the MSCI All Country World Index by 17 percentage points since March - the widest gap since 1991.
Goldman Sachs cautions these sharp surges are typically followed by short-lived peaks. Median forward returns over the next one to three months have historically been close to zero.
The smartest move, analysts say, may be acknowledging that a 32% two-month gain is an outlier event, and sizing positions accordingly.