A History Of U.S. Bull Markets, 1957 to 2022 (2024)

After eight months of gains, the S&P 500 finally entered a bull market in June 2023. The new bull market hasn’t made much progress so far, but history suggests the advances seen since the October 2022 low could be just the first leg of a multi-year market rally.

While S&P 500 bull markets can be extremely unpredictable, they have created a massive amount of wealth for patient, diversified investors over the past century. By studying the history of bull markets, investors can learn what to expect from the current 2023 bull market and understand how to navigate it successfully.

What Is A Bull Market?

A bull market is a period of time during which the stock market—typically represented by the S&P 500 index—gains 20% or more from its last long-term low point.

While this definition is widely accepted among investors, economists and financial professionals, there is no board or body that officially defines bull markets. In fact, experts from time to time may call a market rally of just 19% or even less a bull market.

Bull markets are characterized by positive investor sentiment, but they can sometimes inflate a stock market bubble if the enthusiasm gets out of hand and becomes irrationally exuberant.

Bear markets are the opposite phenomenon to bull markets. A bear market is a period when the S&P 500 pulls back 20% or more from its last all-time high.

There have been 12 bull markets since the S&P 500 launched back in 1957, meaning a new one has started roughly once every 5.5 years. Despite the stock market’s ups and downs, the dozen bull markets over the last six decades have helped the S&P 500 generate a total return of more than 65,000% since 1957.

Bull markets are fueled by a number of different factors, including economic growth, low interest rates, a strong labor market and high consumer confidence. Bull markets and bear markets have occurred with predictable regularity over the past century, and both are a normal part of a healthy economic cycle.

How Long Will the 2023 Bull Market Last?

The 2023 bull market that began in June can be backdated to most recent lows in October 2022, but there’s no way to know for sure how long it could last.

At least one analyst is very positive about the staying power of the 2023 bull market. LPL Financial chief equity strategist Jeffrey Buchbinder says all the ingredients are in place for an extended market rally.

“We think this bull market still has a ways to go and won’t be derailed by a potential mild, short recession over the next year,” Buchbinder says.

Since 1957, the average bull market has lasted nearly five years and generated an average S&P 500 return of more than 169%. Bull markets have historically performed best during the first year following the previous bear market bottom, averaging a 41.8% gain.

Buchbinder says the S&P 500 may be due for a pullback in coming months following its strong run in the first half of 2023 But a short-term correction doesn’t mean the bull market is coming to an end.

“With over $5.5 trillion sitting in money markets and a lot of offsides positioning in the first half, we suspect there will not be a shortage of investors stepping in to buy the dip into this bull market,” he says.

Here’s a brief look back at the history of bull markets since 1957.

S&P 500 Bull Markets 1957 to 2022

Bull Market of 1957-1961: The Cold War

• Length: 50 months
• S&P 500 Return: 86.4%
• Maximum Drawdown: -13.9%

The bull market of the late 1950s and early 1960s was characterized by the ramping up of the Cold War between the U.S. and the Soviet Union.

The U.S. experienced a boom in business franchises in the 1950s. The first McDonald’s (MCD) franchise opened up in Des Plaines, Illinois in 1955, expanding the company’s reach outside of California. By 1959, there would be more than 100 McDonald’s locations around the country, and other businesses adopted the franchise model during this period as well.

The stock market rally ran out of steam in 1961 as corporate earnings and dividend growth could not keep up with soaring stock prices.

Bull Market of 1962-1966: The Kennedy Administration

• Length: 44 months
• S&P 500 Return: 79.8%
• Maximum Drawdown: -10.5%

In the early 1960s, Americans were optimistic about the future with young President John F. Kennedy in the White House. Unfortunately, the nation and the S&P 500 were dealt a heavy blow when Kennedy was assassinated in 1963.

The benchmark index dropped nearly 3% the day Kennedy was shot in Dallas, Texas. Fortunately, the market fully recovered its losses within days and continued to make new highs for nearly three more years.

By 1966, U.S. unemployment was just 4% and consumer spending trends were strong. In fact, the overheating economy sent prices soaring and forced the Federal Reserve to tighten interest rates, a move which ultimately ended the bull market run.

Bull Market of 1966-1968: The Go-Go Market

• Length: 26 months
• S&P 500 Return: 48%
• Maximum Drawdown: -10.1%

The late 1960s were known as the “go-go years” on Wall Street thanks to soaring growth stocks and a number of small investors who became overnight successes thanks to “go-go stocks” such as Polaroid, Telex and Control Data.

Mutual funds also became popular investments during the 1960s. They grew from about $17 billion in assets under management in 1960 to roughly $50 billion by the end of the decade. Mutual funds focused on growth stocks and other high-risk investments became known as “go-go funds.”

Unfortunately, by 1968, the Vietnam War, a weakening economy and high inflation had turned the go-go market into the gone-gone market.

Bull Market of 1970-1973: The Nifty Fifty

• Length: 32 months
• S&P 500 Return: 73.5%
• Maximum Drawdown: -13.9%

The bull market that began in May 1970 was associated with the rise of a group of high-growth companies called the Nifty Fifty. The Nifty Fifty included a number of stocks that are now considered blue chip companies, such as McDonald’s, IBM (IBM) and Walt Disney (DIS).

For nearly three years, the Nifty Fifty led the S&P 500 to generate average annual gains above 23%, but valuations eventually became stretched. When President Richard Nixon relaxed price, wage and rent controls in early 1973, inflation surged and even the Nifty Fifty couldn’t keep the stock market from crashing.

Bull Market of 1974-1980: Oil Shocks and Stagflation

• Length: 74 months
• S&P 500 Return: 125.6%
• Maximum Drawdown: -19.4%

The bull market that began in October 1974 was associated with a slow but steady grind higher for the S&P 500 as the nation navigated the oil crises and stagflation of the 1970s.

The S&P 500 averaged just a 14.1% annual gain during the more than six-year bull market, the lowest annualized gain generated during any bull market in the history of the index.

Inflation surged above 10% in the late 1970s, eventually peaking at more than 14% in 1980. Fed Chair Paul Volcker was forced to raise the federal funds rate to a peak of 19.3% in 1980, conditions the bull market simply couldn’t survive.

Bull Market of 1982-1987: Reaganomics

• Length: 60 months
• S&P 500 Return: 228.8%
• Maximum Drawdown: -14.4%

The bull market that began in August 1982 represents a period of economic prosperity in the U.S. that political conservatives characterize as the era of Reaganomics. Once Volcker reigned in inflation, aggressive interest rate cuts and President Ronald Reagan’s tax cuts triggered a major stock market rally.

For about five years, the S&P 500 generated average annual gains of 26.7%, more than double its long-term historical average. The U.S. unemployment rate dropped from 11% down to 6% during this period. Filmmaker Oliver Stone captured the spirit of greed and aggression in finance during this time in his 1987 movie “Wall Street.”

Bull Market of 1987-2000: The Roaring 1990s

• Length: 147 months
• S&P 500 Return: 582%
• Maximum Drawdown: -19.9%

The record-setting bull market of the roaring 1990s lasted more than a decade and remains one of the most impressive periods of prolonged stock market gains in history. The booming U.S. economy of the 1990s was fueled by the end of the Cold War and the dawn of the Internet Age.

This 12-year bull market is the longest-lasting bull market in S&P 500 history, and the index’s 582% cumulative return is the highest of any bull market on our list.

The 1990s bull market ultimately transitioned into the Dot-Com Bubble in the late 1990s, an era marked by nosebleed valuations for tech stocks such as Amazon.com (AMZN), Cisco Systems (CSCO) and Pets.com.

Bull Market of 2001-2002: The 9/11 Rally

• Length: 3 months
• S&P 500 Return: 21.4%
• Maximum Drawdown: -4.4%

The bull market that began in September 2001 is often forgotten because it was the shortest-lived bull market and generated the lowest S&P 500 return of any bull market in history.

The Dow Jones Industrial Average suffered its worst percentage loss in any week since the Great Depression when it reopened following the September 11 terrorist attacks in 2001. However, the stock market quickly recovered its losses and proceeded to climb a “wall of worry” and gain more than 21% over the next three and a half months.

Bull Market of 2002-2007: The Housing Bubble

• Length: 60 months
• S&P 500 Return: 101.5%
• Maximum Drawdown: -14.7%

The bull market that began in March 2000 was driven by a boom in the U.S. housing market. The period was characterized by historically low interest rates, highly leveraged balance sheets and subprime mortgage lending.

Americans were frequently allowed to secure mortgages with no money down and extremely low “teaser” rates that jumped higher after a year or two. A surging real estate market encouraged many Americans to refinance their mortgages and spend the extra cash.

When subprime borrowers began defaulting en masse, investment banks holding subprime mortgage debt suffered massive losses, triggering the Great Recession that ended the bull market.

Bull Market of 2009-2020: The Great Recession Recovery

• Length: 132 months
• S&P 500 Return: 400.5%
• Maximum Drawdown: -19.8%

The bull market that began in March 2009 is the second-longest bull market in the history of the S&P 500 and is associated with the recovery from the Great Recession and unprecedented quantitative easing from the Fed.

Near-zero interest rates and steady economic growth helped companies generate record profits during the 2010s. The S&P 500’s more than 400% gain during this bull market was driven in large part by big tech stocks Facebook (META) (now Meta Platforms), Amazon.com, Apple (AAPL), Netflix (NFLX) and Google (GOOGL) (now Alphabet), a group collectively known as the FAANG stocks.

Bull Market of 2020-2022: The Pandemic Rally

• Length: 21 months
• S&P 500 Return: 114.4%
• Maximum Drawdown: -9.6%

In March 2020, the beginning of the Covid-19 pandemic triggered the S&P 500’s fastest bear market decline in history. Pandemic lockdowns brought the U.S. economy to a screeching halt, and the government was forced to issue trillions of dollars of economic stimulus to get the country through the crisis.

Once widespread vaccinations blunted the threat of Covid-19, lockdown measures were eased and the combination of pent-up consumer demand, several rounds of direct stimulus payments and a boom in retail trading activity triggered an aggressive rebound in stock prices. In fact, the S&P 500 doubled off its March 2020 lows in just 354 trading days.

Bull Market of 2022-2023: Post-Pandemic Recovery

• Length: 10+ months
• S&P 500 Return: 24.8%
• Maximum Drawdown: -7.8%

The ongoing bull market that started in October 2022 has been associated with optimism that the Federal Reserve can navigate a soft landing for the U.S. economy as it brings inflation down from more than 40-year highs.

Economists had feared a severe recession was unavoidable after the Fed raised interest rates by more than five percentage points in less than 18 months. However, the labor market has remained resilient up to this point, and inflation has been trending steadily lower for the past year.

Looking ahead, investors are now optimistic the Fed can pivot from rate hikes to rate cuts in 2024, opening the door for more upside to stock prices.