The S&P 500 has just delivered one of the biggest quarterly rallies in its history, accumulating 25% and reached a new record on Thursday.
The story shows that the S&P 500 has always been higher during the year after a quarterly rally of 25%, announcing an average of additional 22%profits.
Inflation or tariffs can still derail the rally, but the long -term future seems bright.
10 shares we like better than the S&P 500 ›
This year it was a wild trip to investors. After noting a new high level in mid -February, S&P 500(Snpindex: ^gspc) The decline of 19% of the fears of concerns imposed by the Trump administration would derail economic growth and reward inflation.
However, since its early April low, the market has organized a remarkable recovery, accumulating 26% in the last three months and reaching a new record peak on Thursday, July 10.
To give this move a historical context, the S&P 500 has earned 25% during a three -month period only five times in its history. The data show that in each previous copy, the comparison index has achieved additional profits over the next 12 months, generates double -digit returns. Let’s look at what this means to investors.
Image source: Getty Images.
The S&P 500 generated a return of 25% or more during a three -month period only five times, as the standard index was introduced in 1957, according to Ryan Detrick, a major market strategist at Financial Services Carson Group. His research shows that in the 12 months after each of these cases, S&P has always increased and cut two-digit profits every timeS
This table shows the years in which the S&P 500 generates profits of 25% (or more) during a three -month period and the return on the index in the next 12 months:
Year of S&P 500 25% (+) Rally
S&P 500 12-month change
1975
18%
1982
20%
1999
12%
2009
19%
2020
39%
Average
21%
Data Source: Carson Group. Author table.
As the table shows, the S&P 500 delivers a return on 21% on average in the 12th months after the period when it accumulates 25% within three months. For the context, the comparison index returned by 10% annually since its inception in 1957. This shows that the market results were much better than the average after these rallies.
To quote Wall Street’s old axiom, “past performance is not a guarantee of future results.” This said, given the available data and its historical context, history students can make an informed decision on the trajectory of the market next year. The S&P 500 closed on Thursday at about 6,280, so the index will have to clear 7.033 to hit the lower end of the historic range until next July.
Bullish Analysts are already on board. As my colleague Trever Genewin points out, 2025 End of the year The goals for the S&P 500 range from 5500 (approximately 12% below the prison on Thursday) to 7 007, about 12% higher than current levels. This seems to suggest that the market has a pretty good shot to hit this threshold next year.
Given the historical instability and uncertainty that remains, it is easy to understand why investors may not be confident that the current storage market rally will continue. After all, the tariffs, which are again, have long been in the stream and the battle against constant inflation is far from settled. In addition, experts have controversial opinions about the final impact of the mentioned rates on inflation.
As if to emphasize the issue, President Trump has announced plans to impose two -digit reciprocal tariffs this week on a number of countries if the US has no trade agreements until August 1.
The instability of the markets and the above-mentioned tariffs have some investors concerned about what may have a long-term long-term investors tend to look at the future through a different lens.
Does this mean that the market will continue to publish profits? Not at all. Note that it takes 12 months to return historical examples. Although the data shows that the market will exercise two-digit profits next year, I expect a wider market to deliver several major counterfeits in the coming weeks and months and I would not be surprised if historical volatility has survived, continue.
In addition, adding to your portfolio regularly-in good and bad times-tore much of the investment guessure and helps investors develop the discipline to prosper in the long run, no matter what direction the short-term market winds blow.
History shows that the stock exchange has generated a return of 10% annually, on average in the last 50 years. This is a clear indication that investing with an emphasis on the long term is the worst path to success – even if the story is repeated.
Before you buy a stock in the S&P 500 Index, consider this:
Thehe Motley Fool stock adviser Analyst team has just identified what they think is 10 best shares For investors to buy now … and the S&P 500 Index was not one of them. The 10 shares that made the abbreviation could lead to the return on monsters in the coming years.
Consider whenNetflixMake this list on December 17, 2004 … If you have invested $ 1,000 at the time of our recommendation,You will have $ 671 477! ** Or when NvidiaMake this list on April 15, 2005 … If you have invested $ 1,000 at the time of our recommendation,You will have $ 1,010.880! **
It is now worth notingStock adviserThe total average return is1,047%-prevailing destruction of superiority compared to180%for S&P 500. Don’t miss the top 10 list available when you joinStock adviserS
See the 10 shares »
*Stock Advisor since July 7, 2025
Danny Vena has no position in any of the reserves mentioned. Motley Fool has no position in any of the reserves mentioned. Motley Fool has a policy of disclosure.
The stock exchange did something only for the sixth time in 1957. The story says it signals a big move for the S&P 500 next year. Originally published by Motley Fool
