The S&P 500 is enjoying one of the best years since 1927, thanks to the AI buzz

• The S&P 500 is riding one of its best years since 1927, thanks to the AI hype.
• It's only been 10 times since the 1920s that the benchmark index has performed so well, market veteran Jim Bianco said.

The S&P 500 is enjoying one of its best years since as long back as 1927 based on January-July returns, thanks to the market buzz around artificial intelligence.

"Stocks continue one of their best years on record. With price-only S&P 500 data going back to 1927, this year ranks as the tenth best through July 31,"40-year market veteran Jim Bianco said in a tweet.

"Only 1933, 1987, 1975, 1997, 1989, 1954, 1995, 1943, and 1955 posted better returns through the first seven months of the year," he added.

The benchmark index along with the Nasdaq and Dow Jones have all seen impressive rallies this year as investors cheered tech-focused stocks following the smashing debut of OpenAI's ChatGPT.

Meanwhile, a string of positive economic data - including falling inflation and robust jobs numbers - have given investors more incentive to tap into equities, thereby fueling the rally even more.

That's despite the Federal Reserve jacking up interest rates by more than 500 basis points since early 2022 in a bid to cool historically high inflation.

The S&P 500 has jumped nearly 20% this year, defying pessimists like Morgan Stanley's Mike Wilson who recently admitted the Wall Street bank was wrong to write off 2023's sizzling stock-market rally.

As the index continues its ascent, analysts at JPMorgan predict that a new record high for the S&P 500 "feels inevitable."