Milestone Anniversary and Market Gains
The current S&P 500 bull market is marking its fourth anniversary, rising roughly 119 percent from its October 2022 closing low of 3,577.03 to a record 7,818.93 by October 6, 2026, according to historical market data cited by The Motley Fool. This advance ranks among the most debated expansions in modern financial history, driven by an earnings rebound, artificial intelligence investments, and resilient consumer spending despite geopolitical conflicts, supply chain shocks, and aggressive monetary tightening cycles.
However, this milestone arrives as investors weigh high valuations. According to FactSet data highlighted by The Motley Fool, the S&P 500 trades at approximately 26 times the earnings companies reported over the trailing 12 months, exceeding the 10-year average of 23.6 times earnings. When measured against projected earnings for the next 12 months, the index sits closer to its 10-year average.
Historical Precedents and Near Misses
Historical records show that age alone has rarely signaled an immediate market downturn. Every S&P 500 bull market since 1957 that reached its fourth birthday has continued past it, though the subsequent gains and timing of eventual bear markets varied significantly. For instance, the 1957 bull market ended about seven weeks after turning four, while the 1987 and 2009 rallies lasted more than 12 years and nearly 11 years, respectively.
The current advance nearly terminated in early 2025. Between its record close on February 19, 2025, and its closing low on April 8, 2025, the S&P 500 dropped approximately 19 percent, narrowly avoiding the traditional 20 percent bear market threshold based on closing prices. Similar near misses occurred during past long-term bull markets, including drops of 19.4 percent in 2011 and 19.8 percent in 2018 during the 2009-2020 cycle.
The Persistent Threat of Bond Yields
While historical longevity offers reassurance, ongoing macroeconomic pressures remain a central concern. As Market Watch reports, rising bond yields continue to loom large over equities. The trajectory of bond yields—whether they drift lower, remain sticky, or experience sharp spikes—will likely dictate whether the current equity rally sustains its momentum or faces renewed corrections.
Market analysts note that paying high valuations can increase potential downside risks when a correction eventually occurs. Nevertheless, financial planners emphasize that calendar milestones or index age alone do not provide reliable timing signals for exiting or entering equity markets, pointing instead to disciplined, incremental investment strategies.