The S&P 500 is celebrating a major milestone. The index has been in a bull market for two years. This is the first time this has happened in 13 years.
The S&P 500 is up 10 of the past 11 months.
The S&P 500 is up 9 of the past 10 weeks.
The S&P 500 is up 5 months in a row.
The S&P 500 is up 6 weeks in a row.
— Ryan Detrick, CMT (@RyanDetrick) October 18, 2024
The current bull market began in October 2022. It was driven by falling inflation and interest rate cuts by the Federal Reserve. Technological innovation has also played a role.
The past three days the avg number of S&P 500 components hitting an all-time high has been 10.1%.
Highest since late March.
Be aware, that lead to the April weakness, but was a clue the overall trend was still very strong (stocks are 5 months in a row after April's decline).
— Ryan Detrick, CMT (@RyanDetrick) October 17, 2024
Bull markets tend to last longer than bear markets. Since World War II, the average bull market has lasted about four and a half years. Bear markets usually last around one year.
Stocks To Watch | 📊 Ready, set, trade! Keep an eye on these stocks as they set the market abuzz #StockMarket pic.twitter.com/X8LA5EHENg
— ET NOW (@ETNOWlive) October 18, 2024
The current bull market has already delivered strong returns. The S&P 500 has gained 63% since October 2022. If history is a guide, there could be more gains to come.
S&P 500 bulls drive the longest weekly winning streak in 2024. On the 37th anniversary of the “Black Monday” market crash, the S&P 500 is up for the sixth straight week. (BBG) pic.twitter.com/4ZwtjmGWpR
— Holger Zschaepitz (@Schuldensuehner) October 18, 2024
Goldman Sachs predicts the S&P 500 could reach 6,000 by the end of 2024. They expect it to climb to 6,300 in 2025. This would mean gains of 3% in 2024 and 5% in 2025.
No one can predict the future with certainty. Unexpected events can disrupt market trends. The 2008 financial crisis and the COVID-19 pandemic are examples of this.
Investors should focus on the long term. Buying quality stocks and holding them for many years is a proven strategy. Adding to your portfolio regularly can also help you succeed in any market environment.
The S&P 500 has delivered average annual returns of 10% over the past 50 years. This shows the power of long-term investing. Time is an investor’s greatest ally.
Wall Street strategists believe the bull market can continue. They expect earnings growth to accelerate. The economy also appears stable, especially with the Fed cutting rates.
Historically, bull markets have an average run of 5.5 years. They deliver average gains of 180%. This suggests there could be significant upside ahead.
Two-year bull market insights
High valuations alone may not signal the end of the bull market. Stocks can trade at expensive levels for longer than expected.
A “soft landing” sentiment is currently priced into the market. Bull markets usually end due to specific catalysts. These include spikes in interest rates or rising unemployment.
Neither of these threats is apparent right now. However, unexpected shocks can still occur. Earnings growth will be key to sustaining the market’s advance.
Earnings are projected to grow nearly 10% in 2024 and almost 15% in 2025. Artificial intelligence could boost margins and profitability. This may drive broader market gains over the next several years.
The S&P 500 has gained about 66% over the past two years. The index has hit 44 record highs during this period. This has lifted corporate profits and Americans’ investment accounts.
The bull market has overcome several challenges. These include Fed rate hikes, high inflation, and geopolitical risks. Today, interest rates and inflation are moderating.
Geopolitical threats remain regional. Corporate earnings are expected to rise over the next year. Consumer spending is still edging higher.
This should support employment. The AI revolution has also boosted parts of the market. LPL Financial’s Quincy Krosby sees reasons for the bull market to continue.
She cites an accommodative Fed, solid economic foundation, and stable earnings growth outlook. However, the third year of a bull market can bring challenges. On average, year-three gains are a modest 2%.
Corrections are also common. Every bull market that reached its second anniversary saw at least a 5% pullback in year three. Despite the risks, some bull markets still deliver strong year-three returns.
Three out of the past 11 posted double-digit gains. So even if the ride gets bumpy, profits are still possible.
