The Stock Market Just Finished Its Best Quarter in Years. Here's What History Says Is Coming Next.
Yahoo Finance ·
The S&P 500 ( ^GSPC +0.72% ) was up nearly 15% in the second quarter of 2026, its best performance since the COVID-19 rebound in 2020. After an up-and-down first quarter, the S&P 500 was up roughly 10% for the entire first half, putting it on pace for its fourth consecutive year of double-digit gains. History shows those kinds of streaks are rare. Most notably, the S&P 500 put up five consecutive double-digit-return years from 1995 to 1999. Of course, most people know that streak ended with the tech bubble bursting and resulted in three consecutive years of negative double-digit returns. Naturally, there's some skepticism about how long these kinds of returns can last. The artificial intelligence (AI) boom is still driving revenue and earnings growth, but high inflation, slowing growth, possible Federal Reserve rate hikes, and the geopolitical environment are all current risks. Current FactSet estimates call for 24% earnings growth in 2026 and another 17% in 2027. While anything can certainly happen, it's difficult to imagine stock prices correcting significantly with that kind of earnings growth in the background.
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