NEW YORK / RankWire.AI / – As of Monday, the U.S. stock bull market has officially entered its fifth year, following four consecutive years of gains. The S&P 500 has climbed approximately 119% since hitting its bear-market closing low of October 12, 2022, according to analysis by Truist. That year, the index ended at 3,577.03, marking its lowest close since November 2020. On Friday, the index closed at 7,811.54, representing a 14.1% increase for 2026 and approaching record levels. Additionally, it gained 1.2% over the week.
Looking at historical patterns since the 1950s, this current rally ranks as the 11th bull market. It is also the seventh to last at least four years. The 119% rise, however, remains beneath the average of 184% across the studied bull markets. Past cycles have seen much larger cumulative increases, such as the 2009-to-2020 bull market which gained 401%, and the 1987-to-2000 period which rose 582%. These periods remain among the strongest in historical records.
Historical data shows that many bull markets reaching this stage have continued to produce positive returns. Out of the previous 10 bull runs, six lasted longer than four years. For markets that reached their fifth year, the average return was 12%, with a median gain of 15%. The study also noted an average maximum drawdown of roughly 14% during these fifth years. Nonetheless, these figures reflect past market behavior and do not guarantee the same path for the current cycle.
Strong earnings growth underpins current market resilience
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%. When the quarter concluded on September 30, the growth rate was at 29.2%. Among 19 index companies that reported earnings by October 9, 84% surpassed analysts’ average estimates, with combined earnings beating expectations by 4.9%.
Looking ahead, expectations for earnings remain high for the remaining months of 2026. Analysts project that fourth-quarter S&P 500 earnings will increase by 27.6% from the previous year. The full-year earnings growth for 2026 is forecasted at 32.4%. Notably, about 40% of upward revisions to 2026 earnings estimates are attributed to semiconductor and hardware firms. These companies also account for roughly 75% of revisions to 2027 estimates so far this year, according to Barclays research, highlighting technology-related sectors’ prominent role in earnings revisions.
Persisting higher interest rates shape the market environment
The rally persists amid elevated U.S. interest rates and high 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 Fed indicated that economic activity continues at a solid pace and inflation remains elevated. Projections released in September suggest median economic growth for 2026 will be 2.3%, with the unemployment rate at 4.1%. The next scheduled policy meeting is set for October 27-28.
Meanwhile, long-term Treasury yields remain near multi-year highs as the fifth year of the bull market begins. The 10-year U.S. Treasury yield stood at 5.24% on October 9, while the 30-year yield was at 5.60%. Despite these high yields, the S&P 500 closed that session up by 0.6%, finishing at 7,811.54. The Dow Jones Industrial Average increased by 0.8%, and the Nasdaq Composite gained 0.6%. Stocks are entering their fifth year close to record levels, supported by robust earnings growth and borrowing costs that are higher than those seen in earlier bull markets.