NEW YORK / RankWire.AI / – The U.S. stock bull market has now stretched into its fifth year after completing four years of gains. The S&P 500 has risen roughly 119% from its bear-market closing low on Oct. 12, 2022, according to Truist analysis. At that time, the index closed at 3,577.03, marking its lowest point since November 2020. By Friday, it had closed at 7,811.54, reflecting a 14.1% increase for 2026 and approaching record highs. The weekly change was a 1.2% gain.
This phase ranks as the 11th bull market since the 1950s, with seven of those lasting at least four years. While the 119% increase is notable, it falls short of the 184% average gain observed across the bull markets examined in the study. Past cycles have experienced much larger cumulative growth, with the 2009-to-2020 bull market increasing by 401% and the 1987-to-2000 cycle rising by 582%. These two periods remain some of the most robust in history.
Historical data indicates that many bull markets reaching this stage have delivered positive returns. Out of the last 10 bull markets, six extended beyond four years. For those that reached a fifth year, the average return was 12%, with a median gain of 15%. The study also notes an average maximum drawdown of approximately 14% during fifth years. However, these figures reflect historical patterns rather than a guaranteed outcome for the current cycle.
Corporate Earnings Boost Supports the Current Rally
During this latest rally phase, corporate earnings have shown resilience. FactSet reported that S&P 500 third-quarter earnings on Oct. 9 were tracking 29.6% higher than the same period last year. This marks the third consecutive quarter of year-over-year earnings growth exceeding 25%. The growth rate was 29.2% at the end of the quarter on Sept. 30. Among 19 index companies that reported earnings by Oct. 9, 84% surpassed analysts’ average estimates, with aggregate earnings exceeding estimates by 4.9%.
Expectations for the remainder of the year remain high. Analysts project fourth-quarter S&P 500 earnings will grow by 27.6% compared to the previous year, while full-year 2026 earnings are forecasted to increase by 32.4%. About 40% of the upward revisions to 2026 earnings estimates are attributed to semiconductor and hardware companies. Additionally, these sectors account for roughly 75% of year-to-date revisions to 2027 estimates, according to Barclays research. Data underscores the continuing importance of technology-related companies in earnings revisions.
Interest Rate Environment Remains Elevated Amid Market Gains
The ongoing market rally occurs despite elevated U.S. interest rates and high government bond yields. The Federal Reserve increased its federal funds target range by 25 basis points to 3.75% to 4.00% on Sept. 16. The Fed indicated that economic activity was expanding at a solid pace and inflation persisted at elevated levels. Projections released in September suggest median economic growth for 2026 at 2.3%, with the unemployment rate at 4.1%. The next Fed policy meeting is scheduled for Oct. 27-28.
Long-term Treasury yields also remain near multi-year highs as the bull market enters its fifth year. On Oct. 9, the 10-year U.S. Treasury yield was at 5.24%, while the 30-year yield stood at 5.60%. The S&P 500 closed that session up 0.6%, finishing at 7,811.54. The Dow Jones Industrial Average gained 0.8%, and the Nasdaq Composite increased by 0.6%. As stocks approach five years, they sit near record levels amid strong earnings growth and borrowing costs that remain above earlier bull-market levels.
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