US Stock Market Hits Record High: Should Indian Investors Enter Now?

Wall Street Rally: Tech and Rate Cuts Fuel Record Highs

The US stock market continues to scale new peaks as S&P 500 and Nasdaq Composite surged to record highs, driven by mega-cap tech stocks and optimism surrounding the Federal Reserve’s likely rate cuts.

In the past six months, the Nasdaq Composite has jumped 47%, while the S&P 500 gained 33%. Year-to-date, the Nasdaq is up 19% and the S&P 500 has risen 15% — making it one of the strongest global equity rallies of 2025.

Why Are US Markets Rising?

Despite concerns over the US government shutdown, tariff tensions, and high valuations, investor sentiment remains upbeat, thanks to stable corporate earnings and resilient consumer spending.

Subho Moulik, CEO of Appreciate, said:

“A rate cut or falling interest rate scenario typically supports equity markets. Historically, whenever the Fed has cut rates near record highs, markets have rallied further by an average of 14% over the next 12 months.”

Meanwhile, Arindam Mandal of Marcellus Investment Managers noted that forward earnings continue to rise and Q2–Q3 earnings surprises have exceeded decade-long averages.

“Valuations are elevated, but they’re supported by improving profitability, productivity gains, and a strong AI-driven capital expenditure cycle,” Mandal added.

AI Boom and Earnings Strength

Experts attribute much of the rally to the AI infrastructure boom and improved corporate margins.

“AI-related capex is approaching trillions this decade. Data-centre demand is already driving up power and utility investments,” said Mandal.

This has strengthened earnings visibility for large-cap technology and industrial firms, offsetting macroeconomic uncertainty.

Should Indian Investors Enter the US Market Now?

Analysts remain divided on timing. While long-term fundamentals appear strong, short-term volatility and high valuations call for caution.

Raj Vyas, VP at Teji Mandi, said:

“Investors with long-term goals and risk tolerance can enter gradually. Market resilience in past cycles makes it an attractive diversification opportunity.”

Viram Shah, CEO of Vested Finance, recommends a staggered approach:

“Ladder your exposure over weeks or months. If markets pull back by 5–10%, that’s where selective buying becomes compelling.”

Mandal emphasized that the US market is broader than the “Magnificent 7” tech giants.

“Only 25% of S&P 500 companies beat the index in 2023–24. The broader market has been flat for years — that’s where new opportunities may lie.”

Expert Takeaways

• Valuations are high, but supported by rising earnings.
• AI investment and productivity gains are driving corporate growth.
• Long-term investors can consider gradual entry through ETFs or diversified funds.
• Short-term traders should remain cautious amid potential volatility.

Conclusion

The US market’s record rally underscores strong corporate health and global investor confidence. For Indian investors, timing and discipline will be key — staggered investing in quality sectors beyond big tech could offer long-term rewards while mitigating near-term risks.