When a Bull Market Reaches Three Years Old, How Long Does It Usually Last?

Happy anniversary to the bull market it just turned three years old. Since hitting bottom on October 12, 2022, when the S&P 500 plunged 25.4% from its peak into bear market territory after the Federal Reserve began its aggressive rate hikes, the benchmark index has staged a remarkable comeback. From those lows, it’s climbed steadily through waves of uncertainty to reach fresh all-time highs.

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And according to market history, crossing the three-year mark is often a bullish sign for what’s next.

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“Since World War II, the eight bull markets that made it to their third birthday lasted nearly six and a half years on average, with total gains averaging 213%,” explained Sam Stovall, chief investment strategist at CFRA Research, in a note on Sunday. “This current bull market has advanced 89% through its recent October 8 peak, which suggests that, based on both time and performance, there’s likely still more room to run.”

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A CFRA analysis of data going back to 1947 shows that in their fourth year, bull markets typically post a 12.7% gain on average. The strongest fourth-year performance came during the 1982–1987 bull run, when the S&P 500 jumped 29.7%, while the weakest was during 1949–1956, when the index dipped 2.3%.

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Ari Wald, head of technical analysis at Oppenheimer, found similar evidence from longer bull cycles. Looking at those that extended beyond four years, Wald’s research shows that stocks have averaged 20% gains in their fourth year. With no technical warning signs such as narrowing market breadth or defensive sector leadership  Wald expects this cycle could stretch well into 2026.

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Several powerful tailwinds continue to underpin the rally. The ongoing artificial intelligence boom remains a major catalyst, driving gains across multiple sectors. At the same time, the Federal Reserve’s shift toward policy easing and resilient corporate earnings have reinforced investor confidence.

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Despite a challenging macro backdrop, corporate leaders have largely managed to navigate inflation, supply chain disruptions, and rate volatility with surprising agility  keeping profits intact and growth expectations alive.

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In this type of environment, CFRA’s equity strategists believe that growth-oriented sectors should continue to lead the market higher. Specifically, communication services and information technology are expected to be top beneficiaries as investors stay focused on innovation and digital transformation.

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Of course, even a strong bull market isn’t without challenges. Many investors remain uneasy about several macro and geopolitical risks that could weigh on sentiment.

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Among the key worries are fears of an AI-driven bubble that could eventually burst, persistent inflationary pressures, and a slowing labor market. Add to that the risk of a government shutdown and mounting concerns about the U.S. fiscal deficit, and it’s clear that the market’s path forward may not be smooth.

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Political uncertainty is also returning to the spotlight. Donald Trump’s renewed tariff threats against China recently rattled markets nearly upending the current rally in April and shaving about 2% off the S&P 500 just this past Friday.

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Even with these risks, analysts believe the overall trend remains constructive. As Stovall noted, history suggests the fourth year of a bull market can still bring solid gains, but investors should be prepared for more volatility along the way.

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“While CFRA believes this bull market stands a good chance of marking its fourth birthday, history indicates it may be a turbulent one,” Stovall cautioned.

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In short, the data continues to point toward a durable bull market that still has room to expand but one that could test investors’ patience at times. With supportive fundamentals, strong earnings, and an AI-fueled growth narrative, the next leg of this rally may depend on how well markets can weather policy shifts, global trade tensions, and the ever-changing macro landscape.

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As this three-year-old bull charges into its next phase, the question isn’t just whether it can keep running but how investors can best position themselves to ride the momentum while managing the bumps along the way.

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