S&P 500 Bull Market Turns 3: History Suggests More Room to Run

Last Updated on October 19, 2025

On October 12, 2025, the current S&P 500 bull market marked its third anniversary. Three years earlier, the index had closed at 3,577 amid fears that inflation was spiraling out of control. That day, stocks rebounded sharply after an early drop, a sign that often signals a turning point.

Since then, the rally has remained powerful. As the bull market enters its fourth year, the key question for investors is whether it can continue — and history suggests the odds are favorable.

How This Bull Market Compares to Past Rallies

The S&P 500 has gained nearly 89% since October 2022 (excluding dividends), far outpacing the average three-year bull market return since 1950.

• Year 1: +21.4%, below the historical average of ~40% for the first year of a bull market.
• Year 2: +32.2%, much higher than the historical average of 12.4%.
• Year 3: +16.1% through early October 2025, compared with a long-term average of just 5.2%.

This performance shows a rally that has been not just durable, but unusually strong compared to history.

What’s Driving the Rally?

1. Tech and Artificial Intelligence

A massive share of the rally has come from the so-called “Magnificent Seven” stocks — Amazon, Alphabet, Apple, Broadcom, Meta, Microsoft, and NVIDIA. Since ChatGPT’s release in late 2022, artificial intelligence has fueled investor enthusiasm and powered mega-cap tech stocks to record highs.

2. Strong Economic Backdrop

The U.S. economy has remained resilient, with steady growth and no signs of imminent recession. Falling inflation since late 2022 gave the Federal Reserve room to halt rate hikes and eventually pivot to cuts, easing financial conditions.

3. Supportive Federal Reserve

Unlike past cycles where higher interest rates ended bull runs, today’s Fed appears less threatening. With inflation under control, moderate rate policy is helping keep long-term borrowing costs from surging, supporting both consumers and corporations.

What History Tells Us About Year Four

Bull markets that reach a fourth year often deliver above-average returns. Since 1950, seven bull markets have lasted at least four years. In six of those cases, the S&P 500 rose in year four, averaging a 12.8% gain.

This trend suggests that the current rally has room to run. Still, past performance is not a guarantee — investors should remain mindful of risks.

How Long Could This Bull Market Last?

Historically, bull markets tend to last around five years, though some have stretched much longer. For instance, the rallies that began in 1990 and 2009 each lasted nearly a decade.

At the current pace — averaging 23% annual gains — the present bull run is already performing above long-term medians. Yet compared to the extraordinary post-pandemic rally of 2020 (which delivered 53% in its first year alone), this one looks more sustainable.

Risks That Could Challenge the Bull Market

While momentum is strong, several factors could derail the rally:

• Geopolitical Tensions – Ongoing conflicts or instability could disrupt markets.
• Trade Policy Shifts – Sudden tariff hikes or policy reversals could hurt corporate earnings.
• Labor Market Weakness – Slowing job growth would undermine consumer spending power.
• Narrow Market Leadership – If tech falters, other sectors must step up to sustain growth.

What This Means for Investors

For personal finance readers, the three-year milestone of the S&P 500 bull market carries key takeaways:

1. Stay Invested – History suggests that bull markets lasting three years often continue for several more.
2. Diversify Beyond Tech – The “Magnificent Seven” have led the way, but broader participation is needed for stability.
3. Watch the Fed – Monetary policy remains critical; as long as inflation stays in check, the Fed is unlikely to end the rally.
4. Prepare for Volatility – Even strong bull markets experience corrections, which can create buying opportunities.

Bottom Line

The S&P 500 bull market in 2025 is not only alive but thriving as it enters its fourth year. With history on its side, a supportive Fed, and robust corporate earnings, the rally may have further to run.

For investors, the message is clear: stay diversified, watch for risks, but don’t underestimate the staying power of a bull market that has already defied expectations.

FAQs: S&P 500 Bull Market 2025

Q1: How long has the current S&P 500 bull market lasted?
A: It began in October 2022 and turned three years old in October 2025.

Q2: How strong has the rally been compared to history?
A: The S&P 500 is up nearly 89% since 2022, far above the average three-year bull market gain.

Q3: What is driving this bull market?
A: Mega-cap tech stocks, AI enthusiasm, strong economic growth, and supportive Fed policy.

Q4: How long do bull markets usually last?
A: On average about five years, though some have lasted much longer.

Q5: What risks could end the rally?
A: Geopolitical shocks, inflation surprises, labor market weakness, or a collapse in tech leadership.

Disclaimer: This content is for informational and educational purposes only and does not constitute financial or investment advice. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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