The S & P 500 coming off a “near” bear market is a favorable signal for the stock market, according to Bespoke Investment. Bespoke defines a near bear market as a decline of 18.5% to 19.99% on a closing basis. Earlier this year, the benchmark had its seventh near bear since World War II, registering a drop of 18.9% at its April low. Since then, the S & P 500 has made up its losses, rallying 21.3% in just 45 trading days after registering the market low on April 8, the firm found. The broader index was last just 2% off its February peak. If history is any indication, the astonishing turnaround since is a bullish signal for stocks. Bespoke said that in the year after the prior six instances, the index was higher every single time with an average gain of 13.4%. On a median basis, the rally was even greater, up 15%. The stock market registered its smallest gain following the market low of March 1978, when it rallied just 3.7% one year afterward, according to the firm. It notched its biggest rally following the August 1998 market low, when the S & P 500 surged 22%. However, further gains may be harder to come by, as the conflict between Israel and Iran escalates — and global trade uncertainty persists.
History of ‘near’ bear markets bodes well for this current stock comeback
Jun 17, 2025