economy
December 31, 2025
The S&P 500 is on quite a rare streak of high returns. What history says will happen in 2026
After setting up what looks to be a third year of solid gains, the S&P 500 could be due for more in the new year.
TL;DR
- The S&P 500 is on track for its third consecutive year of double-digit gains, with an estimated 17% increase in 2025.
- Historically, years with at least a 15% annual price gain for the index have seen average next-year returns of approximately 8%.
- These strong bull market years have typically experienced an average maximum drawdown of around 14%.
- This streak of three or more consecutive double-digit annual gains has only occurred twice since 1928.
- The strength of the U.S. economy, consistent corporate earnings growth, and a robust consumer are cited as reasons for the market's resilience.
- In past instances where the S&P 500 gained 10% to 20%, the following year saw a median rise of 11.8% and positive returns 70% of the time.
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