Americans’ investments are out of the grip of one of the longest bear markets in recent history.
The S&P 500 gained 0.6% on Thursday, pushing the market 20% higher than the stock low hit in October, closing at 4,294. That means Wall Street has finally been freed from the clutches of a bear market – when stocks are falling 20% or more from a recent high for an extended period – which began in June 2022.
Although bear markets are common, the last recession marked one of the first major downturns for young investors, and proved particularly painful for older workers who saw their retirement investments plummet. Last year, Wall Street fell on equities as the Federal Reserve embarked on a regime of interest rate hikes to combat record inflation.
But the S&P 500 bucked the bear market by gaining more than 12% this year as what once seemed like some recession never materialized and the labor market remained strong. The gains helped bolster the investment holdings of millions of Americans, who took a $3 trillion hit to their retirement accounts last year.
Better days ahead?
“At the end of the day, the economy has been very resilient,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial.
“So much negativity has been baked into the market,” he said. “Although it’s too early to know for sure, stocks seem to be doing what they normally do when all the negativity has been discounted in the stock market: they’re starting to rise in anticipation of better days ahead.”
The most recent bear market lasted 248 trading days, according to the Wall Street Journal, citing Dow Jones Market Data. By comparison, the average bear market lasted 142 trading days.
Before the latest downturn, investors suffered a short-lived bear market at the start of the pandemic, when stocks plunged more than 20% from February 19, 2020 to March 23, 2020, then recovered to new highs.
With Associated Press reporting.