Prediction: 2026 Will Be the S&P 500's 4th Straight Double-Digit Year

The S&P 500 (SNPINDEX:^GSPC) has passed the 10% line three years running, and not by a little. Leaving out dividends and looking just at price, the index rose about 24% in 2023, about 23% the next year, and another 16% in 2025.

And 2026 is on track to make it four. As I write, the index stands around 7,714, up almost 13% from its 2025 closing value of 6,845.50. It's also logged 28 record closes this year, most recently 7,818.93 on Oct. 6.

That'd be a rare streak. Since 1929, the index has put together four straight double-digit years just three times, with the fourth gain coming in 1945, 1952, and 1998.

To close 2026 up at least 10%, the S&P 500 needs to end the year above about 7,530. This leaves a buffer of about 2.4% with roughly 10 weeks left. I think it'll hold, and the calendar is a big reason.

Image source: Getty Images.

A short list

The three older streaks were decades apart. The first, which began in 1942, had gains of around 12%, 19%, 14%, and 31%. The second, starting in 1949, ran about 10%, 22%, 16%, and 12%. And the third lasted a year longer, with the index up around 34%, 20%, 31%, 27%, and 20% in the five years from 1995 to 1999.

The two earlier streaks, of course, come with a caveat. The S&P 500 began in its 500-stock form on March 4, 1957, so the numbers for the 1940s and early 1950s are from the smaller index that came before it.

The near misses are more recent. The index had three double-digit years from 2012 to 2014, and again from 2019 to 2021. Both streaks stopped at three, as the index slipped less than 1% in 2015 and lost around 19% in 2022.

Big late-year losses are rare

The fourth quarter has historically been kind to the index. Since 1950, it climbed over the last three months of the year in 61 of 76 years.

But the more helpful record for 2026 begins where the calendar is today. Measured from each year's last close on or before Oct. 20 to its final close, the S&P 500 was up in 59 of the 76 years since 1950 and climbed around 3.4% on average.

Plus, it dropped more than the 2.4% it can spare this year in just six of them. Those were 1969, 1973, 1974, 2000, 2008, and 2018. The worst, 1973, cost the index more than 11% over that time, and 2018 cost around 9%.

The strong years held up especially well. Since 1950, the index has gained 10% or more through Oct. 20 in 32 years, including each of the past three, and all of them ended the year above 10%. A few dipped on the way, like 1988, which went from a gain of a bit over 14% on Oct. 20 to around 12% at year-end. But none dropped below the mark.

Sure, 2.4% isn't much cushion, and one bad week might wipe out most of it. After all, the Oct. 16 session alone knocked around 1% off the index. But with a lead like this at this point in the calendar, the odds arguably strongly favor a fourth straight gain.

What happened the year after?

The years that followed those runs were less kind. The index lost around 12% in 1946 and about 7% in 1953. In 1999, it climbed nearly 20% for a fifth straight double-digit year, before sliding about 10% in 2000 when the dot-com bubble popped.

Including the two runs that stopped at three, all five streaks ended with a losing year, not just a slower one.

But five cases is a tiny sample. Each of those down years had its own causes, and one year's result arguably depends much more on things like interest rates and corporate earnings than on how the previous four years went.

In the end, I expect the S&P 500 to close 2026 over 7,530 and post its fourth straight double-digit gain -- something the index last did in 1998. A lead of about 2.4% with roughly 10 weeks left has held up well in the past.

But I wouldn't take a fourth straight year as a reason for a buy-and-hold investor to buy more of the index or to sell any of it. The streak likely says more about the last four years than about the next one.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.