Will buybacks be the market's next growth engine?
After algorithms drove the market to new highs, it seems the next force to push stocks comes from the companies themselves...
Approvals for buybacks in the Russell 3000 index, which includes the 3,000 largest public companies in the US, jumped by 36% compared to last year, reaching a record $428 billion just since the beginning of 2026.
To understand the magnitude of these numbers, we need to go back to 2020:
Why?
Because today these approvals are 176% higher than that period!
That's almost 3 times!
When more companies decide to buy their own stocks from the exchange, it's exactly like an institutional investor deciding to buy a lot of stocks.
But...
What's more important is the next point:
When a company buys back its own shares, it "destroys those shares," meaning there are fewer shares available to the public, so the value of each remaining share simply increases.
History shows that American companies typically execute about 90% of the buybacks they approve, and based on this data, we are on a sure path towards an imaginary sum of $1 trillion in stock buybacks this year.
And that's a lot of money entering the market and creating rigid demand for stocks.
Another point to pay attention to is the timing, because in two weeks, companies' buyback window will reopen!
This is because we are currently in a "blackout" period where companies are forbidden from buying shares due to the release of financial reports, but once this window opens,
another wave of demand is expected...
And could this be exactly what the market needs now?
Because even though the market is already on a historic run (and perhaps it feels like there's no fuel left for further gains)
then in just two weeks, American companies will become the most central buyers in the arena, and this can certainly provide additional fuel for continued gains.