S&P 500 Returns After All-Time Highs
The S&P 500 recently hit a new all-time high after a notable year of peaks in 2025. Is now the time for caution? History tells us attractive performance often follows record highs.
3 mins Reading time
Published on 13 January 2026
Last week, the S&P 500 set a record closing high that neared the still unbroached 7,000 level, after reaching a notable record of 39 all-time highs throughout 2025. Last year’s performance reflects the fifth most all-time highs in a year since 2000 and the 15th most in the entire history of the index.
However, when markets reach new highs, some investors become overly cautious and conclude that the market has hit a ceiling. It’s therefore important to recognize that historically, forward returns after new all-time highs are higher on average than those following other days.
This is a key reason why we advise investors to stay invested at all times, including now. Even when faced with headlines on matters such as geopolitics, the labor market and artificial intelligence capital expenditures, looking past the noise and keeping a long-term perspective is the best way to build wealth.
863965 Exp : 13 January 2027
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Although companies benefiting most directly from AI-related capital spending are the main drivers of higher earnings, strength is no longer confined to that group. Earnings across the broader market remain solid and are expected to grow more than 10% this year and next, suggesting the risk of concentrated market leadership may not be founded.
After sluggish job growth in 2025, investors are looking for signs that the labor market may be stabilizing. With consumer spending driving 70% of economic activity, an improving labor market is essential to sustaining economic growth.
Global equities have risen an annualized 11% since 2020 despite repeated shocks, as resilient growth and earnings have helped markets recover from periods of volatility. While the U.S.-Iran conflict poses near-term inflation and growth risks, markets remain constructive as earnings expectations continue to improve.
Rising earnings estimates continue to support equities despite geopolitical and macroeconomic uncertainty. With profit growth broadening across S&P 500 industries, resilient corporate earnings underpin our constructive outlook for the stock market.
