The S&P 500 is closing in on a milestone that has become increasingly rare in modern markets: a fourth consecutive calendar year of double-digit gains.
As of the latest completed session on Aug. 21, the benchmark index stood at 7,674.37, up 12.11% in 2026 on a price-return basis, according to S&P Dow Jones Indices. That follows gains of 16.39% in 2025, 23.31% in 2024 and 24.23% in 2023.
Should the S&P 500 finish 2026 at least 10% higher, it would produce four consecutive years of double-digit price gains for the first time since the late 1990s.
That period ultimately produced five straight double-digit years from 1995 through 1999, the only five-year streak of its kind for large-cap U.S. stocks since 1926, according to an analysis by the American Association of Individual Investors.
The current rally is already unusual. The 2023-2025 period was only the eighth stretch of at least three consecutive double-digit years since 1926. Five of the previous seven streaks stopped after their third year, while the 1949-1952 advance lasted four years and the dot-com-era rally lasted five.
A separate historical point also puts the current run in perspective. The longest sequence of positive calendar years was nine from 1991 through 1999, while the S&P 500 also recorded eight straight gains from 1982 through 1989. In other words, an extended bull market does not automatically become vulnerable simply because it has lasted several years.
There are also fundamental reasons why stocks have continued climbing.
Corporate earnings have remained strong. FactSet said 86% of S&P 500 companies reporting second-quarter results through Aug. 7 had beaten earnings estimates, compared with a five-year average of 78%. Analysts were expecting full-year 2026 earnings to rise about 30%, while estimates for the third quarter had actually increased during July rather than declining as they normally do early in a quarter.
Artificial intelligence spending and expectations for further productivity gains remain another support for equities, although the 2026 rally has not depended solely on the largest technology companies.
Wall Street remains broadly constructive. UBS Global Wealth Management on Aug. 21 raised its year-end S&P 500 target to 8,100, citing economic growth, earnings and continued AI adoption. The target would imply further upside from current levels.
But stronger earnings have not removed valuation concerns.
The S&P 500 traded at about 20 times expected earnings over the following 12 months in early August, according to FactSet. That was slightly above its 10-year average of 19 times.
High valuations become more troublesome when earnings disappoint, interest rates stay elevated or investors suddenly become less willing to pay premiums for future growth.
That is where the bear-market discussion enters.
A bear market is conventionally defined as a decline of at least 20% from a recent peak. The last S&P 500 bear market arrived in 2022, when inflation, rising interest rates and recession concerns pushed the index more than 20% below its January high. The index ultimately finished that year down 19.44%.
Some of the market’s strongest companies suffered considerably larger declines. Nvidia lost roughly half its value in 2022, while Amazon fell nearly 50%.
Both examples illustrate the uncomfortable reality of long-term investing: companies that eventually become major winners can experience enormous drawdowns along the way.
A Bear Market Will Come — But the Streak Won’t Tell Us When
The temptation after three or four exceptional years is to assume that the market has used up its gains.
History does not really support that conclusion.
Long winning streaks do not cause bear markets. Something normally has to break the economic or earnings story: recession, inflation, monetary tightening, excessive valuations, a financial shock or some combination of those factors.
That distinction matters now.
Yes, four consecutive double-digit years would be rare. And there is a slightly uncomfortable historical statistic behind the current run: six of the seven previous streaks of at least three double-digit years were followed by a negative calendar year when the streak finally ended.
But most of those subsequent losses were relatively modest. The historical pattern therefore tells investors that exceptional returns eventually cool down; it does not provide a calendar date for the next 20% decline.
The current market also has something the final years of some speculative booms did not: very strong earnings growth. Paying 20 times forward earnings is expensive compared with longer-term averages, but it looks different from paying a high multiple while profits are collapsing.
That does not mean investors should ignore risk. Expectations have risen alongside prices. The better the market performs, the more companies need to deliver the earnings investors have already priced in.
The more useful lesson from previous bear markets is therefore not to predict exactly when the next one begins.
It is to decide beforehand what to do when prices start falling.
For investors with long time horizons, continuing to invest through downturns has historically been more reliable than trying to sell before every decline and buy back at the bottom. The problem with market timing is that it requires two correct decisions: when to leave and when to return.
Recoveries can also begin while the news still looks terrible.
After the pandemic crash, the S&P 500 recovered its February 2020 high within months. Other recoveries have taken much longer: after the dot-com bust, the index needed more than seven years to regain its March 2000 peak.
That is why “keep buying” needs one qualification.
It makes far more sense as a disciplined strategy for a diversified portfolio than as a rule to buy every individual stock simply because its price has fallen. An index can replace failing companies over time. An individual business can permanently deteriorate.
For long-term investors, the most valuable preparation for the next bear market may therefore be less dramatic: maintaining diversification, avoiding leverage that could force selling, continuing regular investments and leaving enough liquidity for near-term expenses.
The next bear market is inevitable in the broad sense that markets will eventually suffer another 20% decline. Whether it arrives late in 2026, several years from now or after the S&P 500 extends its winning streak further is unknowable.
And that may be the key lesson of the current rally. A long bull market can make investors complacent, but fear of an approaching bear market can be equally costly if it keeps them out of a market that continues climbing.