The Secular Bull Market Roadmap Supports SPX 10,000+

A secular bull market is a long-term uptrend that spans multiple business cycles and includes cyclical bull and bear phases tied to economic expansions and contractions. For the S&P 500 Index, major secular bull markets occurred during 1950-1966, 1980-2000, and from 2013 to the present. Secular bear markets occurred during 1937-1950, 1966-1980, and 2000-2013.

In our view, the current environment represents a mid-to-late cycle secular bull market with the potential for the SPX to surpass 10,000. The current secular bull market began with the April 2013 breakout above the major highs from 2000 and 2007, confirming the end of the 2000-2013 secular bear market and the start of a new structural uptrend.

Historical precedent suggests the current cycle may still have several years remaining. The 1950-1966 secular bull market lasted roughly 16 years, while the 1980-2000 secular bull market extended approximately 20 years. By comparison, the current secular bull market has entered its 13th year and could potentially extend into the 2029-2033 timeframe with the SPX moving well beyond 10,000. Continued innovation, AI and technology-driven earnings growth, and persistent mega cap leadership have driven this secular uptrend.

Importantly, secular bull markets are not linear. Even during powerful long-term advances, markets experience cyclical corrections, recessions, bear markets, and periods of volatility, while the dominant long-term trend remains higher.

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Secular overlay chart from the 2000, 1966, and 1937 peaks looks extended.

The overlay chart beginning from the secular bear market peaks in 1937, 1966, and 2000 highlights the transitions from those long-term bear phases into subsequent secular bull markets for the S&P 500. While there still appears to be room for the current secular bull market that began in 2013 to continue higher, the present cycle is becoming increasingly extended relative to the 1937-1966 and 1966-2000 bear-to-bull market analogs.

Importantly, the current cycle has maintained a relatively close alignment with prior secular bull market paths, and the overlay analysis suggests that this relationship could continue into late 2029 before potentially becoming more volatile during the 2030s.

Today’s environment resembles a hybrid between the late-1990s technology melt-up and the inflationary secular bull market of the 1950s and 1960s.

Our “mega cap melt-up” theme (see our Market Mosaic post from earlier this week) supports the idea that the current environment aligns with the late-1990s phase of the 1980-2000 secular bull market, culminating in the technology-driven rally into the 2000 peak. Similar to that period, leadership today remains concentrated in mega cap growth, technology, and innovation-driven equities.

However, there is an important macro distinction between now and the late 1990s. The 1980-2000 secular bull market unfolded during a deflationary environment characterized by a long-term secular decline in interest rates and the U.S. 10-Year Treasury Yield. By contrast, the current secular bull market also shares similarities with the 1950-1966 period, which was an inflationary secular bull market accompanied by a secular uptrend in the 10-year yield.

This suggests the current market environment may represent a hybrid of the two historical analogs — combining the speculative and innovation-driven characteristics of the late-1990s technology melt-up with the inflationary and commodity-supportive backdrop of the 1950s and 1960s secular bull market.

Our broader work on commodities and inflation-sensitive assets continues to support this inflationary secular bull market framework, particularly given the emergence of large base patterns across broad commodity indices and commodity-related equities.

SPX also extended on its rallies from its generational lows overlay chart

The overlay chart comparing long-term advances from the generational lows in the S&P 500 from 1942, 1974, and 2009 continues to support the case for additional upside toward 10,000 and potentially beyond into the early-to-mid 2030s.

While the SPX appears increasingly extended relative to prior analogs, the market has remained persistently overextended for much of the advance from the 2009 low, particularly following the April 2013 secular bull market breakout.

The overlay suggests that strong secular bull markets can remain extended for prolonged periods, especially during later-cycle momentum phases characterized by powerful mega cap leadership, expanding liquidity, and sustained investor optimism.

Secular trends for the DJI and 10-year Treasury yield

Secular trends in the U.S. 10-Year Treasury Yield have historically lasted roughly twice as long as secular trends in equities, with each full interest rate cycle often encompassing two secular equity cycles in indices such as the Dow Jones Industrial Average.

The 1921-1941 secular decline in yields coincided with the 1920s bull market, the Wall Street Crash of 1929, and the bear market associated with the Great Depression. The 1941-1981 secular uptrend in yields spanned World War II, the 1950-1966 secular bull market, and the 1966-1980 secular bear market. The 1981-2020 secular decline in yields aligned with the 1980-2000 secular bull market and the 2000-2013 secular bear market.

A key question today is whether the current secular uptrend in the 10-year yield began with the 2020 pandemic spike low or with the 2012 low. Strictly speaking, the secular uptrend began from the 2020 low, making the cycle roughly six years old. However, if the COVID-era collapse in yields is viewed as a policy-driven anomaly, there is a compelling case that the broader secular uptrend actually began with the 2012 low, which would place the current cycle closer to 14 years in duration and align it with the 2013 secular breakout in the S&P 500 Index.

Historically, the 1966-1980 secular equity bear market developed as the 10-year yield moved above the 5.3% area and became more entrenched following sustained moves north of 6.0%. That historical relationship suggests the long-term path of interest rates may ultimately play a major role in determining when the current secular equity bull market eventually transitions into its next secular bear phase.

Secular bull markets are more fun than secular bear markets

Bob Farrell is a Wall Street legend who spent his career at Merrill Lynch. One of his “10 stock market rules to remember” is that bull markets are more fun than bear markets.

Average and median rolling 12-month returns suggest that secular bull markets are far more rewarding than secular bear markets.

During secular bull markets, the S&P 500 is up 81% of the time, with average and median 12-month rolling returns of 13.4% and 13.9%, respectively. In contrast, secular bear markets show the SPX up only 60% of the time, with average and median 12-month rolling returns of 2.5% and 4.4%, respectively.

For context, since 1928 the SPX has posted average and median 12-month rolling returns of 8.1% and 9.8%, respectively, with gains occurring about 69% of the time. This highlights that the long-term equity experience is heavily influenced by whether the market is in a secular bull or secular bear regime.

Overall, secular bull markets are characterized not only by stronger upside trends but also by higher probability of positive returns, making them significantly more rewarding environments for investors compared to secular bear phases.

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