The S&P 500 has been on a remarkable run since October 2022, climbing nearly 70% and cementing one of the most resilient bull markets in recent history. As we approach 2025, investors are asking a critical question: Is this rally sustainable for a third consecutive year?
According to Quincy Crosby, chief global strategist at LPL Financial, the answer is a confident yes. Despite short-term volatility driven by election cycles and geopolitical uncertainty, the underlying fundamentals suggest the bull market remains firmly intact—and could extend well into 2025.
Let’s explore the three key signs that support this optimistic outlook.
Strong Corporate Earnings Fuel Market Momentum
One of the most reliable indicators of a healthy bull market is consistent corporate earnings growth—and that’s exactly what we’re seeing.
As third-quarter earnings reports roll in, major financial institutions like JPMorgan Chase, Goldman Sachs, and Wells Fargo have already surpassed consensus estimates. This strong start signals robust profitability across key sectors of the economy.
While the so-called "Magnificent Seven" tech giants have driven much of the S&P 500’s return this year—contributing 34% of total gains—the market is now showing signs of broadening participation. More companies outside the tech sphere are stepping up, helping to diversify and stabilize gains.
According to Morningstar category data, investor capital is shifting from overconcentration in technology toward sectors like real estate, consumer staples, and utilities—a sign of growing confidence in the wider economy.
Analysts project 4.2% profit growth for S&P 500 companies in Q3, with expectations for continued improvement. Crosby anticipates earnings will rise throughout 2025, supported by strong operating margins and sustained consumer spending.
Even more encouraging: non-tech companies are catching up. Jack Ablin, chief investment officer at Cresset Capital Management, forecasts double-digit profit growth for the remaining 493 companies in the index during Q1 2025.
👉 Discover how market trends can shape your investment strategy in a rising bull market.
This earnings resilience suggests the market isn’t being carried by a narrow group of stocks but is instead building a broader, more sustainable foundation.
Soft Landing on the Horizon: Fed Policy and Economic Stability
Another major factor supporting the continuation of the bull market is the increasing likelihood of a soft landing—a scenario where inflation cools without triggering a recession.
For much of 2023 and early 2024, fears of aggressive interest rate hikes weighed on investor sentiment. But now, with headline inflation significantly lower than its 8.2% peak in 2022, and core metrics trending downward, the Federal Reserve appears poised to shift toward rate cuts—especially if labor market conditions weaken.
Jerome Powell has acknowledged that the path to price stability may be “bumpy,” but overall economic data supports a gradual normalization. The September retail sales report, for instance, showed a 0.4% month-over-month increase, exceeding expectations and underscoring resilient consumer demand.
Goldman Sachs and other leading economists have revised their recession forecasts downward, now estimating just a 15% chance of a downturn within the next 12 months—the same as the long-term average. This reduced risk profile boosts investor confidence and supports continued equity market gains.
Crosby believes the Fed stands ready to act decisively if needed, cutting rates more aggressively should economic momentum falter. This policy flexibility provides a safety net that strengthens market resilience heading into 2025.
Historical Precedent Favors a Third-Year Rally
Markets don’t operate in a vacuum—and history offers valuable context.
Since World War II, bull markets that have lasted two full years have typically continued into a third year. This pattern suggests that age alone isn’t a reason to expect a reversal. Instead, external shocks—like recessions, rate hikes, or geopolitical crises—are usually what end extended rallies.
Right now, none of those red flags are flashing.
Even election-related volatility—a common concern among investors—has historically had limited long-term impact. While stock market fluctuations tend to increase in the three months leading up to Election Day, the S&P 500 has finished the year higher 83% of the time since 1950.
Moreover, markets often experience a fourth-quarter rally after election results bring clarity and policy certainty. Seasonality trends further support this pattern, with November and December frequently delivering strong returns.
Crosby emphasizes that investors focus too much on election “uncertainty” while overlooking the post-election “certainty” that typically benefits markets.
"The market concludes the year during the most hospitable period in terms of seasonality," Crosby noted.
This historical consistency reinforces the argument that current conditions are aligned with another year of gains.
Frequently Asked Questions (FAQ)
Q: Can a bull market really last three years?
A: Yes. Since WWII, many bull markets have extended beyond two years. Duration depends more on economic fundamentals than time alone.
Q: How do elections affect the stock market?
A: Short-term volatility is common before elections, but markets historically rise afterward due to increased policy clarity and seasonal trends.
Q: Are high valuations a risk for the 2025 outlook?
A: While some sectors are richly valued, broadening earnings growth and potential rate cuts help justify current levels.
Q: What would end this bull market?
A: A recession, unexpected inflation resurgence, sharp rate hikes, or major geopolitical event could reverse trends—but none appear imminent.
Q: Should I adjust my portfolio for 2025?
A: Consider diversifying beyond tech into sectors showing earnings momentum, such as consumer staples, financials, and real estate.
Why Now Is Not the Time to Exit
Skepticism is natural after two strong years. But pulling back based on fear of volatility or political noise could mean missing out on further gains.
The combination of strong earnings, a likely soft landing, and favorable historical patterns creates a compelling case for market continuity in 2025.
Investors who stay focused on fundamentals—rather than headlines—are better positioned to benefit from sustained growth.
👉 Learn how to navigate evolving market conditions with data-driven insights.
Additionally, global macro trends—including AI-driven productivity gains, resilient labor markets, and moderating inflation—provide further tailwinds that weren’t present at the start of 2023.
Final Thoughts: Patience Pays in Bull Markets
Bull markets don’t die of old age—they end when economic or policy conditions turn decisively negative. Today’s environment shows no such signs.
With corporate profits expanding beyond Big Tech, central banks shifting toward support mode, and seasonal trends aligning favorably, the stage is set for another year of growth.
Rather than timing an exit, investors should consider using periods of volatility—such as those around elections—as opportunities to rebalance and reinforce long-term positions.
👉 Stay ahead of market shifts with strategic insights designed for long-term success.
As Quincy Crosby aptly put it: there’s no compelling reason for this bull to surrender just yet.
Core Keywords: bull market 2025, S&P 500 earnings, soft landing economy, Federal Reserve rate cuts, election year investing, stock market outlook, corporate earnings growth, historical market trends