U.S. Bull Market Celebrates Third Anniversary with Broad-Based Gains

The U.S. bull market reaches its third anniversary this Sunday, standing as a testament to the resilience and adaptability of equities since the pandemic-era downturn. What began as a tech-driven rally in October 2022 has evolved into a marketplace marked by sector-wide participation, encompassing cyclical stocks, small-cap equities, and defensive sectors like healthcare and staples. Analysts suggest this diversification lays the foundation for greater market stability and continued growth.

Since bottoming out on October 12, 2022, the S&P 500 Index has registered an impressive 88.5% gain. This performance ranks as the second-highest three-year return among the 14 U.S. bull markets since 1950, trailing only the rally that followed the 2009 financial crisis. While earlier this year the market experienced a sharp 19% decline due to tariff-related commentary by former President Donald Trump, it swiftly rebounded. This recovery is now highlighted as one of the fastest ever after a significant drop exceeding 15%.

Evolving from Tech-Led Momentum to Market-Wide Growth

Initially propelled by enthusiasm surrounding artificial intelligence (AI) within the technology sector, the bull market's dynamics have shifted significantly in 2025. Currently, a broader array of sectors is driving the rally, including industrials, financials, energy, and utilities. Defensive industries like healthcare and consumer staples have also shown marked improvement recently, further solidifying the market’s balanced growth.

The Russell 2000 Index, a benchmark for small-cap stocks, reached a record high this September for the first time in nearly four years. This milestone highlights the renewed vigor within smaller-cap equities, a category often seen as a barometer for risk appetite and economic optimism. All 11 primary S&P 500 sectors have posted positive returns this year, underscoring the breadth of this market expansion. Among the top-performing sectors are industrials (+17.0%) and utilities (+18.7%), both of which outpaced the broader market’s impressive gains.

“The rotation across sectors is the lifeblood of a sustained bull market,” stated Ryan Detrick, Chief Strategist at Carson Group, during an interview with CNBC. “This is no longer just a tech rally—it’s market-wide momentum.”

AI Innovation and Overheating Warnings

Wall Street remains bullish on the transformative potential of AI technologies, with leading companies ramping up spending to enhance productivity and earnings. In fact, the S&P 500’s third-quarter earnings are projected to grow by 8% year-over-year, fueled by advancements in AI and high expectations within the technology industry.

Chris Zand, Executive Vice President at Osterweis, encourages patience and a long-term perspective. “While anxiety about buying at the top is understandable, the potential for sustained high returns remains strong. Any corrections should be viewed as buying opportunities,” he noted.

However, some experts urge caution, citing risks of overheating in the tech sector. Chris Grisanti, Chief Strategist at MAI Capital, commented that while AI advancements have driven productivity and profitability expectations, profit-taking in tech stocks could occur in the near term. Similarly, Josh Emanuel, Chief Investment Officer at Wilshire, warned of potential technical overbought conditions throughout U.S. equities, particularly in technology. Despite this, he emphasized that AI and robotics are still in their nascent stages and offer significant long-term promise.

Earnings Season as a Barometer for Market Sustainability

The third-quarter earnings season officially kicks off this week, with major financial institutions like JPMorgan Chase, Wells Fargo, and Goldman Sachs set to report their results. These reports will be closely scrutinized by investors for signs of whether the market’s upward momentum can be maintained.

The outlook for the bull market remains cautiously optimistic as it celebrates its third anniversary. The broadening participation across sectors strengthens confidence in the market’s durability, although concerns linger about potential overexuberance in key areas like technology. As companies release their earnings reports, their performance will provide critical insights into the trajectory of this record-setting bull market, setting the stage for what’s to come.