The S&P 500 is in a bull market. Here's what that means and how long the bull might run

Wall Street calls the S&P 500 a bull market because it has increased by at least 20% from its recent low.

Why is it called a bull market?

Sam Stovall is the chief investment strategist of CFRA. He said that Wall Street calls a booming stock market a bull market, because bulls are on the move. Bears hibernate in contrast to bulls, which represent a declining market.

WHEN DID THE NEW BULL MARKET BEGIN?

The latest bull market was considered to begin on October 13, 2022. This is the day after S&P 500 reached its lowest point of 3,577.03.

WHY HAS THE MARKET RALLIED?

The economy has so far defied all predictions and not fallen into recession.

Last year, the markets fell on concerns that the worst inflation for decades would have a devastating effect on the economy. Wall Street was spooked more specifically by the Federal Reserve's aggressive measures to combat high inflation.

The Fed has raised interest rates from zero to the highest since 2007. In order to reduce inflation, the Fed slowed down the economy in an effort to drag down stock prices and bond prices. Many investors were bracing themselves for a possible recession, but the job market's remarkable resilience has kept the economy afloat.

Since the summer of last year, inflation has slowed. Wall Street is hoping that the Fed will soon stop raising interest rates.

So, everything is fine?

It is unlikely that the Fed has finished raising interest rates. The traders expect the Fed to continue raising rates in July, even if they hold the rate steady at their next meeting. This would be the Fed's first pause in over a year. It is hoped that this will be the final rate hike. However, persistent inflation could change that.

This puts pressure on the economy, and in particular on the manufacturing and banking industries. These sectors have already begun to show signs of cracking.

The S&P 500 has seen a lot of gains this year, but they have been largely attributed to a few stocks. Critics say that the gains are not sustainable. Apple (+30%) Microsoft (+44%) Alphabet (+25%) are the three companies that have the highest S&P 500 market value. They all beat the index. The index gives them extra weight because of their size, and nearly half of the stocks have fallen in 2023.

HOW LONG DO BULL MARS TYPICALLY LASTEN?

Since 1932, bull market have averaged nearly five years. The S&P 500 has seen a gain of 177.2%. The longest bull run began in March 2009 near the end the Great Recession and lasted almost 11 years.

When was the last bull market?

The previous bull run began on March 23, 2020. This was when the market recovered after a rapid bear market due to the onset global pandemic. This bull market, which lasted about 21 months, was the shortest since 1932. The S&P 500 still more than doubled in value (up 114.4%).

WEREN'T YOU JUST in a Bear Market?

S&P 500 has effectively ended the bear market which began on January 3, 2022. Officially, it is believed that the bear market ended on October 12, 2022.

How mean was that bear?

The bear market, which is now over, lasted for nine months. It saw a 25.4% drop. As far as bear market go, it was a relatively mild one. Since 1950, a bear market averaged 13 months. The S&P 500 dropped 34.2%. Since 1929, an average bear market lasted 19.6 month and the S&P500 fell 39.4%.