NEW YORK / RankWire.AI / – The U.S. stock bull market entered its fifth year Monday following four consecutive years of gains. Since its bear-market low on October 12, 2022, the S&P 500 has increased approximately 119%, according to Truist analysis. The index closed that 2022 session at 3,577.03, its lowest point since November 2020, before rising to 7,811.54 on Friday, representing a 14.1% increase for 2026 and approaching record levels. The index also gained 1.2% over the past week.
This latest advance ranks as the 11th bull market since the 1950s in the historical series, with seven of those reaching at least four years in duration. The 119% growth remains below the 184% average increase recorded across the bull markets studied. Historically, earlier cycles demonstrated significantly larger cumulative gains, with the 2009-to-2020 bull market rising by 401%, and the 1987-to-2000 cycle surging 582%. These periods continue to be among the most robust in historical comparisons.
Past market performance has generally remained positive during this stage of bull markets. Six out of the previous ten bull runs extended beyond four years. For markets that have reached a fifth year, the average return was 12%, with a median gain of 15%. The study also notes an average maximum drawdown of roughly 14% during fifth years. These figures illustrate past behavior rather than guaranteeing the current cycle’s future path.
Earnings growth bolsters the current market trend
Corporate earnings have shown resilience during the current rally phase. FactSet reported that S&P 500 third-quarter earnings were tracking 29.6% higher than the same period last year as of Oct. 9. This marks the third consecutive quarter with year-over-year earnings growth exceeding 25%. At the close on September 30, the growth rate stood at 29.2%. Among 19 index companies reporting by Oct. 9, 84% surpassed analysts’ average earnings estimates, with aggregate earnings exceeding expectations by 4.9%.
Market expectations for the remainder of the year remain optimistic. Analysts project a 27.6% increase in S&P 500 earnings for the fourth quarter compared to last year. Full-year 2026 earnings are estimated to grow by 32.4%. Approximately 40% of the upward revisions to 2026 earnings estimates are attributed to semiconductor and hardware companies. These firms also account for around 75% of revisions to 2027 estimates made so far this year, according to Barclays research. The data underscores the ongoing importance of technology-related sectors in earnings revisions.
Market conditions influenced by persistent higher interest rates
The ongoing market rally occurs alongside 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 central bank indicated that economic activity remains solid and inflation continues to stay high. Projections released in September estimate median 2026 economic growth at 2.3%, with the unemployment rate at 4.1%. The next Federal Reserve policy meeting is scheduled from Oct. 27 to Oct. 28.
Meanwhile, long-term Treasury yields are approaching multi-year highs as the bull market enters its fifth year. On Oct. 9, the 10-year U.S. Treasury yield was 5.24%, and the 30-year yield stood at 5.60%. Despite these high borrowing costs, the S&P 500 closed that session up 0.6%, finishing at 7,811.54. The Dow Jones Industrial Average increased by 0.8%, and the Nasdaq Composite gained 0.6%. Stocks remain near record levels amid strong earnings growth and elevated borrowing costs, marking a significant phase of the ongoing market cycle.