NEW YORK / RankWire.AI / – After completing four years of gains, the U.S. stock bull market marked the beginning of its fifth year Monday. The S&P 500 has climbed approximately 119% since its bear-market closing low of October 12, 2022, according to Truist analysis. The index ended the 2022 session at 3,577.03, its lowest point since November 2020, but on Friday, it closed at 7,811.54, reflecting a 14.1% rise for 2026 and approaching record levels. The weekly increase was 1.2%.
This current rally is the 11th bull market since the 1950s in the historical record, and it is the seventh to last at least four years. The 119% increase, however, is still below the average of 184% seen across the bull markets studied. Previous cycles saw much larger cumulative gains: the 2009-to-2020 bull market gained 401%, and the period from 1987 to 2000 increased by 582%. These periods remain among the strongest in historical comparisons.
Many past bull markets reaching this stage have delivered positive returns. Out of the previous 10, six lasted longer than four years. When markets reach a fifth year, the average return is 12%, with a median gain of 15%. The study also indicates an average maximum drawdown of around 14% during fifth years. These figures describe historical trends rather than a guaranteed outcome for the current cycle.
Corporate earnings bolster current market momentum
During the latest phase of the rally, corporate earnings have shown notable strength. FactSet reported that S&P 500 third-quarter earnings as of October 9 were tracking 29.6% above the same period last year. This would mark the third consecutive quarter with year-over-year earnings growth exceeding 25%. At the end of the quarter on September 30, the growth rate was 29.2%. Of the 19 index companies reporting by October 9, 84% surpassed analysts’ average earnings 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 to increase by 27.6% compared to the previous year. For the full year 2026, earnings growth is forecasted at 32.4%. About 40% of upward revisions to 2026 estimates are attributed to semiconductor and hardware companies. Additionally, these sectors account for roughly 75% of revisions to 2027 estimates so far this year, according to Barclays research. Data underscores the continued importance of technology-related businesses in earnings revisions.
Interest rate environment remains a key factor
The upward movement in stocks persists despite higher U.S. interest rates and elevated government bond yields. On September 16, the Federal Reserve increased its federal funds target range by 25 basis points to 3.75% to 4.00%. The central bank noted that economic activity was expanding at a solid pace and that inflation remained elevated. The median forecast for 2026 projects economic growth at 2.3%, with an unemployment rate of 4.1%. The Fed’s upcoming policy meeting is scheduled for October 27-28.
Meanwhile, long-term Treasury yields are near multi-year peaks as the bull market enters its fifth year. The 10-year U.S. Treasury yield was 5.24% on October 9, while the 30-year yield stood at 5.60%. Despite these high yields, the S&P 500 closed that day 0.6% higher at 7,811.54. The Dow Jones Industrial Average increased by 0.8%, and the Nasdaq Composite added 0.6%. Stocks are entering their fifth year close to record levels, supported by strong earnings growth and borrowing costs above those of previous bull markets.