November 6, 2025
Bull Market Turns 3 Years Old
U.S. equities continued to climb to new record highs in October as the bull market turned three years old. The S&P 500 began its current bull run on Oct. 12, 2022, soaring over 80% since then and adding about $28 trillion in market value, according to Bloomberg. It has been a wonderful period for investors of all approaches, as portfolios across conservative, balanced, and growth allocations have participated in meaningful gains.
This bull market remains in rally mode. October marked the sixth consecutive monthly gain for the S&P 500, Dow Jones Industrial Average, and Russell 2000, while the Nasdaq has advanced for seven months in a row.
Equities have been climbing a wall of worry. In October alone, investors navigated a sudden escalation and de-escalation in U.S. China trade tensions, a hawkish rate cut by the Fed, and a federal government shutdown.
Concerns about the sustainability of the bull market center on elevated S&P 500 valuation multiples and debates over an “AI Bubble,” which have proliferated in financial media and heightened investor fears. According to Goldman Sachs, while markets are frothy, they are not in a bubble due to supporting earnings growth, a resilient economy, and consistent fund flows from retail investors, foreign buyers, and corporate buybacks.
Despite the negative headlines, earnings and interest rates remain the primary drivers of the market.
Q3 earnings season has been strong. With roughly 70% of the S&P 500 reported, the blended earnings growth rate has risen to 10.7%, surpassing the 7.9% analysts had expected before earnings season began. This marks the fourth consecutive quarter of double-digit earnings growth, according to FactSet.
The standout performers remain the major technology companies, particularly those driving the expansion of artificial intelligence. These firms continue to deliver exceptional profits and sustained growth at historically high margins, reinforcing their role as the engines of the current market rally.
The hyperscalers are reinvesting much of these profits into massive capital expenditures for AI infrastructure, with spending projections accelerating into 2026.
This buildout has broad implications beyond the tech sector. Financials benefit from increased transaction volumes and technology adoption, industrials gain from demand for AI hardware and automation, utilities see rising infrastructure needs, and communication services capture higher data traffic and cloud usage. This interconnected growth helps support stock prices across a significant portion of the S&P 500, making the AI expansion a market-wide tailwind rather than a single-sector phenomenon.
The Fed cut rates again in October but Powell said a December cut is not a foregone conclusion. Investors are interpreting this as a sign that the Fed will continue to be cautious and data driven in its approach.
The market’s recent strength does not make it immune to disruption. The quick market reaction to October’s U.S. China trade flare-up highlights that even strong trends can be interrupted, reinforcing the need to monitor risks carefully.
The broadening rally of the Summer has faded in the fall, breadth is now negative. This suggests that fewer stocks are participating in the market’s gains, which can signal a period of consolidation.
The Supreme Court will begin to hear the case to end Trump’s tariff use in November. This could be a market moving event before year end as it may influence trade policy and corporate earnings expectations.
The Democratic Party made some gains in yesterday blue states in an off year. While these elections are limited in scope, they provide insight into voter sentiment heading into 2026.
While the consensus expectation is for a year-end rally it may have to wait until December. Market participants may need clarity on economic data, earnings, and policy developments before pushing valuations higher.
We will focus on taking any losses in taxable accounts before year end and positioning for 2026.
We wish you all a safe and happy Thanksgiving with family and friends.
