How Long Is Our Run? Navigating the S&P 500’s Bull Market in an Uncertain Era

The S&P 500’s current bull market, which began on October 12, 2022, has delivered a 71% return by early 2025, lifting the index from 3,577 to a peak of 6,144.15 in February 2025. Yet, as the market faces headwinds ranging from inflation to geopolitical tensions, a critical question looms: How much longer can this run last?

The Bull Market in Context

The current expansion, now over 1,000 days old, remains shorter than the historical average of 5.4 years (1,964 days). By comparison, the post-2009 bull market lasted over 11 years. If this cycle aligns with averages, it could theoretically persist until late 2028. However, the S&P 500’s forward price-to-earnings (P/E) ratio of 22.2—above its 10-year average of 18.3—raises concerns about overvaluation. Such elevated valuations have historically preceded corrections, as seen during the dot-com bubble and the 2020 pandemic peak.

Key Drivers and Risks

1. Economic Resilience: Despite challenges, the U.S. economy has shown surprising strength. GDP grew 2.8% in 2024, outpacing its 10-year average, while unemployment dipped to 4% in early 2025. Corporate earnings have also held up, supported by consumer spending and business investments.

2. Inflation Pressures: Core inflation, as measured by the PCE price index, has accelerated for four consecutive months, reaching 3.8% in April 2025—above the Fed’s 2% target. With wages and housing costs stubbornly elevated, fears of a prolonged inflationary environment are mounting.

3. Geopolitical Uncertainty: President Trump’s April 2025 announcement of sweeping tariffs on imported goods triggered a 19% sell-off from the February peak, briefly pushing the S&P 500 into bear territory. While tariff rollbacks eased the decline, the episode underscored the fragility of investor confidence in an era of trade wars.

Analyst Perspectives: Bullish vs. Bearish Crosscurrents

• Bullish Case: Optimists like Ed Yardeni (Yardeni Research) and Tom Lee (Fundstrat) argue that the economy’s underlying strength could sustain the bull market through 2030. Lee forecasts the S&P 500 could hit 15,000 by 2030, citing tech innovation and corporate resilience.
• Bearish Concerns: Skeptics such as Andrew Slimmon (Morgan Stanley) and Gene Munster (Deepwater Asset Management) warn of late-cycle risks. Slimmon notes that valuations are “in the top decile of historical extremes,” while Munster fears a “spectacular bubble burst” within two years.

Investor sentiment remains divided. A JPMorgan survey in April 2025 found that 93% of respondents expect the S&P 500 to stay below 6,000 for the next 12 months, with 40% anticipating a 5,000–5,500 range. Over 60% of investors foresee stagflation—a toxic mix of high inflation and stagnant growth—by year-end.

Navigating the Volatility

The market’s April 8 low of 4,982.77, its lowest since the bull market began, offers a critical reference point. Historically, corrections driven by policy shifts (like tariffs) have resolved faster than those rooted in economic collapse. For instance, the 2018 tariff-driven dip rebounded swiftly in 2019 after trade talks eased tensions.

Yet, the current environment carries unique risks. Elevated valuations, coupled with inflation and political instability, mean the path forward is anything but straightforward. A “death cross” (50-day moving average below the 200-day) in April 2025 signaled further downside risks, though recent rebounds suggest some stabilization.

Conclusion: Proceed with Caution

The S&P 500’s bull market has legs—but they are increasingly fragile. While historical averages suggest it could run for another three years, today’s challenges demand a nuanced approach:

1. Acknowledge the Risks: Inflation, geopolitical turmoil, and stretched valuations are unlikely to abate soon. A forward P/E of 22.2 leaves little margin for error.
2. Focus on Quality: Prioritize companies with strong balance sheets, pricing power, and secular growth tailwinds (e.g., tech innovation, healthcare).
3. Stay Liquid: Maintain cash reserves to capitalize on dips. The April 2025 low saw a 14% average recovery over the next year in similar historical scenarios.
4. Monitor Policy Shifts: Trade and fiscal decisions will shape the market’s trajectory. A resolution to tariff disputes could reignite momentum, while further inflation spikes could trigger Fed overreach.

In the end, the bull market’s longevity hinges on whether the economy can navigate these crosscurrents. As of May 2025, with the S&P 500 at 5,670.97, investors must weigh the odds of a prolonged expansion against the growing likelihood of a “hard landing.” The next 12 months will likely test both resilience and resolve.

This analysis synthesizes valuation metrics, macroeconomic data, and geopolitical risks to provide a balanced view of the S&P 500’s trajectory. While the bull market’s start in 2022 remains intact, its future is far from certain—a reality investors must confront with both optimism and caution.