The Standard & Poor’s (S&P) 500 index, one of the major indices on the New York Stock Exchange, is on track to see its highest growth rate since 1997.

According to Bloomberg on the 29th, the S&P 500 index rose by 20.3% between January and September this year. With one day of trading left in September, if the current trend continues, the stock's performance for the first three quarters will likely be the largest since the 27.9% surge in 1997. On the last trading day of September (the 30th), the S&P 500 index closed at 5,762.48 points, up 0.42% (24.31 points) from the previous day.

The S&P 500 index has been on the rise for three consecutive weeks, gaining 5.1% in the third quarter alone, with its total market capitalization surpassing $50 trillion for the first time.

September is typically the worst month for the U.S. stock market, but this year has defied that trend with remarkable gains. Despite uncertainties surrounding the upcoming November 5 presidential election, potential shifts in the Federal Reserve’s (Fed) monetary policy, and recession fears, investors expect the rally to continue into October.

Even though big tech companies, which have led the market since last year, have recently shown signs of slowing down, the S&P 500 has continued its upward momentum. While the Nasdaq 100 index only rose 1.7% in the third quarter, the S&P 500 gained nearly 9%.

The overall rise in stock prices across industries is attributed to expectations that the Fed’s interest rate cuts will lead to a soft landing for the economy. Mary Ann Bartels, chief investment strategist at Sanctuary Wealth, predicted that the S&P 500 index could hit 6,000 by the end of this year, representing a 4.6% increase from its recent closing. She stated, “I’m extremely optimistic about the market. While the semiconductor rally paused, people took notice, but in the fourth quarter, big tech and semiconductor companies will lead the market higher again.”

A report from Goldman Sachs also noted that hedge funds are placing three times as many bets on IT stocks rising as on them falling. However, the possibility of a recession may still hold stock prices back. The New York Federal Reserve continues to see a high chance of a recession within the next 12 months.

On the other hand, most investors expect steady economic growth. The Atlanta Federal Reserve’s GDPNow model predicts that the real gross domestic product (GDP) for the third quarter will rise to 3.1%, up from 3% in the second quarter.

Option positions are also following a similar trend. The 5-day moving average of the put/call ratio, which rises as bets on falling stocks increase, approached 0.51, its lowest since July 2023.