For one, the October high came amid a bout of investor euphoria, driven by a strong earnings season and excitement about the promise of artificial intelligence. A sentiment gauge compiled by Ned Davis Research, which tracks 20 indicators including volatility, investor positioning and institutional investor surveys, is sitting below 62.5, the bottom of a range that’s been associated with extreme optimism. Since the S&P 500 clocked its previous record in late October, investors have targeted sectors beyond Big Tech, partly because the AI tide is lifting more boats (utilities, industrial firms), but mainly because the Federal Reserve signaled it would reduce rates — as it did on Wednesday — at the same time economists and strategists expect the American economy to surge in the new year, driving profits higher.