What a difference a month makes. The stock market has rebounded more than 10% to new all-time highs just weeks after being down over 5% on the year. If March does prove to be the low point for the S&P 500, a number of historically bullish patterns begin to emerge:
- 1-year returns following March bottoms have been strong
- 2026 fits the profile of a “come-from-behind” year
- Strong April rebounds have often led to further upside
- Positive years following a 3-year winning streak have averaged gains of ~21%
Let’s dive in.
Was march the bottom?
In last month’s article, Oil prices in the drivers seat, we noted that many major market bottoms have formed in March—most notably during the Great Recession in 2009 and the Covid selloff in 2020. We believe the market may have just formed another one. The first signal came on April 2nd, when oil prices surged nearly 10% in a single day, yet the S&P 500 finished essentially unchanged.
That divergence was notable. In recent weeks, markets had been highly sensitive to moves in oil—selling off on any spike higher. The fact that stocks held steady despite a sharp increase suggested investors were beginning to look through the conflict and refocus on fundamentals like strong corporate earnings and the continued buildout of the AI economy.
If March was indeed the bottom, there are two bullish statistics worth keeping in mind. First, the S&P 500 has averaged a gain of 32.5% in the year following a major March low. Second, in “come-from-behind” years—when the market is down through March but finishes the year higher—stocks have averaged a 21% gain from April through December.
April strength bodes well
The confidence behind our March bottom call stems in part from the extreme strength we’ve seen so far in April. Historically, strong Aprils have tended to follow through with full-year strength. In the 10 instances where the market rallied more than 7.5% in April, it finished the year higher 9 times, with a median gain of 24%. The S&P 500 is up 9% in April at the time of this writing.
The April rally back to all-time highs officially ended the March drawdown at roughly 10%. Since 1926, there have been 44 years where the S&P 500 did not decline more than 15% from a peak at any point during the year. The result? All 44 years finished positive, with an average return of 19.5%—and more than half posting gains of at least 15%.
Four year win streak comes back into play
With the S&P 500 back in positive territory for the year, the potential for a four-year winning streak is back in play. This is something we’ve been monitoring for months after studying prior three-year win streaks—where the market is up three years in a row, as it is today.
There have been six instances of four-year winning streaks in the S&P 500’s history, with the fourth year averaging gains of more than 20%. Only one such year (1994) delivered muted returns, while all others rose at least 15%.
The longer the S&P 500 remains in positive territory—currently up about 3.5% on the year—the more we view this as a constructive signal for 2026.
In summary, April’s strong rebound has triggered a number of historically bullish signals for the stock market. Regardless of how we might expect markets to react to geopolitical events, price action suggests investors are comfortable looking past near-term uncertainty. This type of rebound is not without precedent and has often set the stage for continued gains.
For those who remain skeptical, the current environment—marked by stability and a return to higher levels—offers a reasonable opportunity to make portfolio adjustments aligned with your comfort level.
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