Is there still room for growth in US stocks after three years of continuous growth? Historical experience shows that the bull market has not reached its end. Analysts look at S&P 500 at the end of the year to 7,700 points

As the new year begins in full swing, the strong performance of US stocks has brought more confidence to investors, as well as new problems. The S&P 500 just recorded its third consecutive year of double-digit gains. Although this made the 2026 market environment more challenging, judging from historical experience, this bull market has not necessarily come to an end.

According to the data, since the phased low in October 2022, as of October 2025, the S&P 500 index has accumulated a cumulative increase of 98% in about 36 and a half months. The Zhitong Finance App learned that on Monday, Oppenheimer's chief technical strategist Ari Wald pointed out that historical data shows that since 1932, there have been 8 bull markets in the US stock market that have continued for at least 3 years.

However, history's guidance at this stage is unclear. Statistics show that after entering the 39th to 51st month of the bull market, the index rose by an average of about 22% in five cases, but fell by an average of about 7% on the other three times. The result was more like a “coin toss.”

It is particularly rare for a market to rise sharply for many years, such as 2022 to 2025. Wald pointed out that since 1942, after three years of continuous double-digit increases, the S&P 500 index continued to record strong positive returns in three out of five situations (1945, 1952, 1998); however, if it tried to impact the fourth consecutive year of double-digit gains, historical returns declined markedly, and only succeeded once in 1999. “An increase is still possible, but stock selection ability and risk management are becoming particularly important,” he concluded.

Against this backdrop, Wald himself remained optimistic and gave the S&P 500 index a target of 7,700 points by the end of 2026. He believes that every time a bull market comes to an end, there are often clear warning signs, including a marked narrowing in market breadth, a rise in defensive stocks, and a tightening credit environment. At the beginning of 2026, these signs were yet to be seen.

Furthermore, he also pointed out that midterm election years are generally friendly to the stock market, although gains tend to be concentrated in the second half of the year. Wald believes that the late 90s of the last century are somewhat comparable. 1998 was also a midterm election year after three consecutive years of strong gains. Driven by a bull market in technology stocks, it continued to rise 27% throughout the year despite experiencing a correction in the middle of the year. At the time, the performance of small-cap stocks was particularly critical.

Wald said that now the Russell 2000 Index is trying to break through the five-year consolidation range. If the breakthrough is successful, the market environment will be closer to 1997 than 1998, which will provide “firepower” for the next round of growth. He also mentioned that other strategists also believe that the current situation is similar to the early days of the internet bubble, not on the eve of the bubble bursting.

But not all agencies are equally aggressive. Adam Parker, founder of Trivariate Research, pointed out that in the past 100 years, the market has only achieved double-digit growth for four or more consecutive years, so from a statistical point of view, the market increase may moderate in the next year.

Parker's benchmark judgment for 2026 is a “moderate increase.” He expects the earnings per share of the S&P 500 index components to increase by about 10% this year, lower than the 15% expected by the market, but it is still at a steady level.

Looking at the medium to long term, he is not pessimistic about the outlook for US stocks. Parker estimates that if EPS grows at an average annual rate of 10% in the next few years and maintains a forward price-earnings ratio of about 21 times, the S&P 500 index is expected to approach 10,000 points by 2030, corresponding to an average annual return of about 8%.