Many investors had high hopes going into 2024. The market’s robust first-quarter rally still managed to surprise them.

Everything from stocks to bitcoin to gold marched to new records. The S&P 500 gained 10% in the first quarter, its best start to the year since 2019. Any weakness in the stock market hasn’t lasted more than a few sessions, with investors buying the dip and sending the index to 22 all-time closing highs.

And it isn’t just a small group of megacap tech stocks participating in the rally. All but one of the 11 sectors of the S&P 500 have risen. The Russell 2000 index of small-cap stocks is up more than 4%. A Russell index of value stocks outperformed its growth counterpart in the past month.

The economy continues to defy expectations. Recession worries have mostly disappeared. Resilient corporate profits, enthusiasm around artificial-intelligence developments and hopes that the Federal Reserve is on track to begin cutting interest rates have given investors plenty of reasons to continue buying.

“My cautious optimism going into 2024 may have underestimated the power of momentum,” said Jeff Kilburg, chief executive and founder of KKM Financial.

With such a furious start to the year, some investors wonder if returns will get harder from here. Companies in the S&P 500 have gained more than $9 trillion in market value since last October’s low, according to Dow Jones Market Data.

Investors came into 2024 riding the high of huge gains from a small cohort of big technology stocks known as the Magnificent Seven. Since the S&P 500 is weighted by market value, these companies are highly influential on the direction and sentiment of the broader market.

The dominance of the Magnificent Seven faded with steep pullbacks in Tesla and Apple in the first quarter, but the rest of the market remained buoyant. More than half of the stocks in the S&P 500 have notched new 52-week highs.

AI-related stocks in particular charged higher, extending a run-up that kicked off last spring. Shares of Nvidia, which makes chips that power AI technology, have soared about 82%. Other semiconductor stocks such as Advanced Micro Devices, Applied Materials and Micron Technology have each gained more than 20%. Super Micro Computer, which joined the S&P 500 this month, is up more than 200%.

Mark Hatala, a 58-year-old professor in Kirksville, Mo., first bought Nvidia stock more than two decades ago after a student introduced him to the company. Now, given Nvidia’s monster rally, Hatala is planning to retire early next year. “The stock returns have made it ridiculous to keep working,” Hatala said.

Risk-taking appears plentiful. In one of the buzziest initial public offerings of the past few years, Reddit surged 48% on the day of its stock-market debut. The introduction of bitcoin exchange-traded funds in January kicked off a buying spree in cryptocurrencies, with bitcoin advancing 61% year to date.

Even safe-haven assets such as gold have soared. Front-month gold futures rose 8.4% in March, the largest one-month gain since July 2020.

Bullish sentiment among fund managers in March reached the highest level since the beginning of 2022, according to a monthly Bank of America survey. Their allocation to stocks and risk appetite are also at multiyear highs, the survey found.

A Goldilocks economy underpins investors’ bets. Consumers are still spending briskly, employers are still hiring and unemployment is still below 4%. Fed Chair Jerome Powell believes inflation remains on a downward trend, despite a recent spell of hotter-than-expected price reports.

Coming into the year, investors expected the Fed to cut its benchmark short-term rate six times in 2024. That turned out to be overly optimistic. Fed officials are penciling in three rate cuts this year.

Treasury yields climbed as investors recalibrated rate-cut projections. The 10-year U.S. Treasury yield—a benchmark for borrowing costs from mortgages to car loans to corporate bonds—4.192% on Thursday from 3.860% at the end of 2023.

“If the market has been wrong about anything over these past few years, it’s been way too precise in trying to determine the timing of the Fed pivot,” said Marta Norton, chief investment officer of the Americas for Morningstar Wealth. She said her firm has added to its positions in consumer-staples and utilities stocks.

History suggests stocks are well-positioned to keep the good times going. When the S&P 500 adds 8% or more in the first quarter, it finishes the rest of the year higher 94% of the time, with an average gain of 9.7% over the next three quarters, according to a Dow Jones Market Data analysis of index performance since 1950.

Presidential-election years such as this one also tend to end in stock-market gains. Since 1950, the S&P 500 has risen in a presidential-election year 83% of the time and has averaged a 7.3% gain in those years, according to Dow Jones Market Data.

Still, some investors wonder if the underlying strength of corporate profits can keep pace with investor optimism. Analysts expect companies in the S&P 500 to report a third straight quarter of earnings growth. Profits for the first quarter are projected to have risen roughly more than 3% from the same period a year earlier, according to FactSet. For the year, analysts expect 11% earnings growth.

“If fundamentals don’t catch up, that momentum can reverse very quickly,” said Anna Rathbun, chief investment officer at CBIZ Investment Advisory Services.

Stocks could appear overvalued if companies fail to deliver expected profits. Companies in the S&P 500 are trading around 21 times their projected earnings over the next 12 months, above the five-year average of 19, according to FactSet.

Mark Hackett, chief of investment research at Nationwide, believes the momentum in markets and a strong underlying economy could carry the S&P 500 higher the rest of the year. But he worries that investors could turn complacent, becoming oblivious to potential risks such as stickier-than-expected inflation or weaker-than-expected earnings.

“Are we getting to the point where it is just too easy?” he said.