They have flocked to stock funds at a pace rarely seen since 2008, but some warn that shares look expensive historically
4 min
A roaring market rally since the U.S. presidential election has driven up the price of everything from shares of technology and manufacturing giants to cryptocurrencies. Many investors are betting it has room to run.
Investors have stampeded into funds tracking U.S. stocks and picked up trades that would profit if the rally that recently sent the S&P 500 above 6000 for the first time reaches new heights.
U.S. equity exchange-traded and mutual funds drew nearly $56 billion in the week ended Wednesday, the second-largest weekly haul in records going back to 2008, according to EPFR data. Such funds have drawn inflows for seven consecutive months, the longest streak since 2021, when a dizzying market melt-up sent stocks to repeated records.
Driving the optimism? Many investors said they expect lower taxes and fewer regulations during Donald Trump ’s second term as president.
Dominic Rizzo, a technology portfolio manager at T. Rowe Price , said tariffs could boost U.S. manufacturing, driving a surge in domestic spending and investment. Other investors are simply breathing a sigh of relief that the election has passed.
The share of investors surveyed by the American Association of Individual Investors who said they were bullish jumped to 49.8% this past week, while the share of those reporting a neutral sentiment dropped to the lowest level since 2022. About 40% of those surveyed said the U.S. election made them more optimistic about the market.
“Animal spirits are alive and well right now,” Rizzo said.
Rizzo oversees shares of Nvidia and other tech giants. After a big run-up, he is still optimistic about the group ahead of Nvidia’s earnings report Wednesday. Investors are also fixated on the presidential transition and how it might shape the market’s winners and losers.
Some market watchers caution that investors might be too quick to latch on to policies that could boost markets, while ignoring plans that might stir inflation and market volatility.
Stocks wobbled at the end of the past week, and bitcoin retreated. Trump’s appointment of the vaccine skeptic Robert F. Kennedy Jr. as health and human services secretary pressured several stocks including Moderna and Pfizer . Shares of Tesla , which soared after the election and pushed the company’s market cap back above $1 trillion, have stumbled in recent sessions. Shares of Trump Media & Technology Group fell 12% for the week.
Still, the S&P 500 index and the Nasdaq Composite closed Friday within about 3.2% of their respective record highs. With just weeks left in 2024, the S&P 500 is on track to jump more than 20% for the year, the second consecutive year of gains of that magnitude. It is a back-to-back advance that has been seen only three times over the past century, according to Deutsche Bank.
Joe Johnson, 37, said he has waded into hot stocks including Nvidia, Tesla and a crypto play, MicroStrategy . His portfolio has swelled this year, and he is feeling so good about the market that he is thinking about pouring his cash pile into stocks. He is eyeing such industrial giants as Caterpillar and Deere , which he believes will benefit from a strong economy.
“I am bullish on the market,” Johnson said. “The euphoria everyone is feeling is warranted.”
Johnson said he is excited about Trump’s presidency and expects his policies to benefit his small business in Maryland, which sells boat-maintenance kits, engine parts and protective covers.
Many investors have piled into segments of the market such as small companies, which are especially sensitive to the economy.
The Russell 2000 has risen almost 2% since the election, and one of the largest exchange-traded funds tied to the index attracted $3.9 billion in inflows in a single session this month, the most since June 2007. Money managers, meanwhile, have increased positions that would pay out if the rally continued, driving net bullish bets in the futures market to the highest level in more than four years.
Some of the riskiest corners of financial markets are thriving too. Three of the top five days for trading in call options, trades that give the right to buy shares, have occurred this month, according to options records going back to 1973. That has pushed up the cost of bullish trades that would profit if stocks soared.
A frenzy of trading in cryptocurrencies sent bitcoin prices above $90,000 and unleashed a historic rush into crypto funds. Dogecoin, a speculative coin backed by nothing, shot up after Trump revealed plans to create a government-efficiency department called DOGE, to be co-led by Elon Musk , a dogecoin evangelist. Its $55 billion market cap now tops that of Ford Motor.
Trading in the over-the-counter market, which includes riskier securities such as penny stocks, has surged 27% in November from the same time last year, according to OTC Markets Group.
Some said stocks are looking expensive after their recent run. The S&P 500 recently traded at 22 times its expected earnings over the next 12 months, above its five-year average of roughly 20. A Bank of America strategist, Savita Subramanian, called market sentiment and positioning “dangerously bullish” in a note to clients Friday.
Bond investors have been sending a different signal, driving the benchmark 10-year Treasury yield to 4.426% on Friday, up from 4.072% around a month ago. They are banking on bigger deficits and higher inflation in the years ahead. Federal Reserve Chair Jerome Powell indicated Thursday that the central bank will take its time to trim interest rates, pressuring bonds and stocks.
One measure closely tracked by investors, the equity risk premium —or the gap between the S&P 500’s earnings yield and that of 10-year Treasurys—shrank close to zero, the lowest level since 2002, according to Dow Jones Market Data. That means the reward for owning stocks over bonds is dwindling.
“The market is awfully expensive to have a melt-up,” said Rob Arnott , the founder and chairman of Research Affiliates.
Copyright 2020, Dow Jones & Company, Inc. All Rights Reserved Worldwide. LEARN MORE
The Australian leather house has opened an immersive four-day pop-up in Manhattan, unveiling its Bloom Collection and redefining what a product launch can look like.
Following the successful launch of its Palais Collection, MAISON de SABRÉ has unveiled a new modular handbag system offering more than 720 styling combinations.
Gold miners are emerging as a compelling way to navigate market uncertainty, with analysts pointing to strong cash flows, attractive valuations and rising profit margins. As gold prices stabilize above US$4,000 an ounce, mining stocks could offer investors both downside protection and long-term upside.
3 min
Gold is one of the market’s go-to hedges in rocky times. Don’t forget that gold miners’ stocks are too.
The stock market’s gains in 2026 belie the rocky macroeconomic picture: elevated inflation, heightened geopolitical tensions, and jitters about the artificial-intelligence trade. That backdrop, in theory, should be the time for gold to shine. Instead, the price of the yellow metal has tumbled more than 5% so far, after last year’s blistering 65% rally. In part, the U.S. dollar’s recovery has stymied gold, which benefited from the greenback’s weakness in 2025.
Even with the precious metal’s recent weakness, gold mining stocks could be the best way to profit from this year’s uncertainty.
Gold miners “are a valuable hedge against macro risks that would likely be damaging for equities,” BCA Research’s Noah Weisberger and Rishabh Shah wrote this week.
Concerns about the Federal Reserve’s next moves to tackle inflation, the increasingly crowded AI trade, and steep valuations for tech stocks are just some of the drivers that could help gold’s price get on even footing— and lead to even bigger gains for miner stocks.
These stocks’ prices tend to outpace gold’s moves, because the companies have fixed operational costs. So when gold’s price rallies, their profit margins soar, and vice versa. For instance, the VanEck Gold Miners GDX +7.39% exchange-traded fund has fallen 11% this year as the metal has slumped.
Now, gold’s price just needs to stabilize to help miners’ stocks take off, and that seems to be happening. The precious metal has recently found support above the $4,000 level, and has stuck in a narrow range since the end of June. But its price rose ever so slightly in July, ending a four-month losing streak for the metal. Technical analysis also suggests that gold is due for a comeback.
Barron’s recently wrote that the pullbacks for both gold miners and the metal itself are overdone. Senior technical analyst Doug Busch noted that the VanEck ETF is on the “verge of a breakout” and has the potential to hit $11o in early 2027, up more than 40% from its current price.
Gold miners also have more than their role as a market hedge going for them. Their fundamentals are solid, too, says Chris Mancini, portfolio co-manager of the Gabelli Gold Fund.
“Precious metals miners are generating substantial amounts of free cash flow given profit margins of over $2,000 per ounce, and are returning this cash to shareholders through buybacks and dividends,” he said in an email.
“Buying the miners is a cheap way to get exposure to the price of gold,” he added. His fund owns Newmont NEM +6.71%, a Barron’s stock pick last year, and Agnico Eagle Mines as top holdings, as well as miners Northern Star Resources, Endeavour Mining, and Kinross Gold K+8.59%.
Miners are better businesses than they used to be, the BCA team added.
“Capex is more disciplined, margins are high and rising…and they are largely independent of the AI story,” Weisberger, BCA’s head of equities, and Shah, a senior analyst, wrote.
That last part is key. AI is disrupting the software industry and many other services and information-oriented businesses, and investors have piled into AI stocks. But ChatGPT, Claude, Grok, and other large-language models aren’t going to replace the need to mine for metals.
“Equity portfolios can benefit from exposure to quality that is uncorrelated to AI risk, and gold miners fit the bill,” the BCA team said.
They recommend that investors buy the VanEck Gold Miners ETF, which owns top miners such as Agnico, Barrick Mining ABX +7.24%, and Newmont.
An important bonus for big gold miners’ stocks is that their valuations are attractive after the gold’s pullback, too. The VanEck ETF is now trading at just a little more than nine times next year’s earnings estimates. That’s a big discount to its five-year average price-to-earnings ratio of 14, according to FactSet.
What’s more, the ETF is currently valued at a more than 50% discount to the S&P 500 SPX -0.17%, which is trading for about 19 times earnings estimates for 2027. Mining stocks have typically traded at just a 25% discount to the broader market over the past five years. So there is significant upside for the group if valuations move back toward normal levels.
One factor that complicates mining stocks as a market hedge, of course, is if stocks bounce back, which has been the case so far in August.
But both the market and economic outlooks remain cloudy, and investors remain nervous about the Fed’s next moves and AI stocks. Gold miners should do just fine, even if the anxious mood on Wall Street persists.
