The U.S. stock market has maintained a long-term upward trend for decades, which is not a random "miracle" but the result of in-depth resonance among systems, enterprises and capital. As a global capital haven and a barometer of innovation, it has formed a unique operational mechanism and profit model, providing valuable enlightenment for global investors. Exploring its core growth drivers and current market trends is crucial for grasping investment opportunities.
A sound institutional system is the cornerstone of the U.S. stock market’s ability to resist volatility. First of all, the mature registration-based system and strict delisting mechanism realize the survival of the fittest. The listing does not set rigid profit thresholds, focusing more on the authenticity of information disclosure, allowing high-quality innovative enterprises to obtain capital support quickly. At the same time, the annual delisting rate remains at 6%-8%, efficiently eliminating junk stocks and shell companies to avoid "bad money driving out good money" . Secondly, the strict investor protection system, such as the class action mechanism and information disclosure accountability system, imposes huge fines on corporate fraud, forcing enterprises to operate standardizedly. In addition, long-term capital accounts for more than 60%, with pension funds and mutual funds as the main force. These funds pursue steady appreciation, do not chase ups and downs blindly, and effectively smooth short-term market fluctuations.
The strong strength of enterprises is the core driving force for the market’s upward trend. Leading U.S. stocks, represented by the "Magnificent Seven" (Tesla, Alphabet, Apple, NVIDIA, Amazon, Meta Platforms and Microsoft), have maintained R&D investment accounting for 10%-20% of their revenue for a long time, continuously promoting technological innovation and product iteration . From smartphones and cloud computing to new energy vehicles and AI, disruptive innovations continue to open up growth space and drive long-term stable profit growth. Moreover, high-quality enterprises attach great importance to shareholder returns, forming a positive cycle of "profit growth → cash dividends and stock repurchases → stock price rise" through stable dividends (3%-4% dividend rate) and large-scale repurchases . In addition, most leading enterprises have a global layout, which can not only enjoy global growth dividends but also disperse the risks of a single market, enhancing their anti-risk capabilities.
A rational market ecology dominated by institutions has laid a solid foundation for value investment. Institutional investors hold more than 70% of the circulating market value of U.S. stocks, including pension funds, insurance funds and hedge funds . With professional research capabilities and risk control systems, they focus more on corporate profitability, cash flow and industry status rather than short-term stock price fluctuations, promoting more rational market pricing. This atmosphere also forces enterprises to focus on their main businesses and enhance profitability, instead of engaging in short-term market value management, thus forming a virtuous cycle of "rational investment → value discovery → optimal resource allocation".
At present, the U.S. stock market is facing new opportunities and challenges. On the one hand, small-cap stocks represented by the Russell 2000 Index have performed strongly, with an increase of more than 13% in 2025, benefiting from the Fed’s interest rate cut cycle . Many small and medium-sized enterprises rely on short-term financing, and lower interest rates can reduce their borrowing costs and accelerate profit improvement. On the other hand, the market has different views on the prospects of technology giants. Some strategists suggest reducing holdings in the "Magnificent Seven", believing that the promotion of new technologies will benefit more non-tech enterprises and erode the high profit margins of tech giants . In addition, the AI investment cycle may face differentiation, with "a few winners and many losers" .
In conclusion, the long-term growth of the U.S. stock market lies in the win-win closed loop of "market → enterprise → investor". For investors, it is more important to grasp the core logic than to chase short-term trends. While paying attention to technological innovation opportunities, they should also focus on the rotation of market sectors and risk control. The U.S. stock market’s experience in institutional construction, enterprise cultivation and capital guidance also provides important reference for the development of global capital markets.
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