S&P 500 Index rises 16% in two months, reaching a post-war rare record; Deutsche Bank warns: last time was before the 1987 market crash

According to the latest research report from Deutsche Bank, the S&P 500 Index saw a cumulative increase of 16% from April to May this year, marking an extremely rare surge since World War II. Deutsche Bank pointed out that similar rallies have occurred only four times in the past eighty years, three of which took place during recovery phases following recessions. The only instance not associated with a post-recession rebound was in the months leading up to the 1987 "Black Monday" stock market crash.

Data shows that during January to February 1987, the U.S. stock market also experienced a similarly strong rally, followed by the infamous "Black Monday" on October 19 of the same year. On that day, the S&P 500 Index plunged over 20% in a single session, and the Dow Jones Industrial Index plummeted 22.6%, becoming one of the most severe single-day collapses in Wall Street's history.

Deutsche Bank macro strategist Henry Allen emphasized that current market conditions are not completely devoid of fundamental support. Factors such as the ongoing AI investment boom, robust earnings among large technology companies, and the resilience of economic data have all contributed to the continual setting of new highs in the U.S. stock market. However, he also admitted that the current pace of gains has surpassed all historical cases outside of recessions in modern times.