The S&P 500 Just Did Something It Hasn't Done in Over 20 Years. Here's What History Says Could Be Next for Stocks.

Two main themes have dominated the stock market so far in 2025: uncertainty and volatility. The S&P 500 (SNPINDEX: ^GSPC) sank into correction territory a few weeks ago and came precariously close to entering a bear market.

However, the narrative has changed somewhat in recent days. Perhaps surprisingly, the S&P 500 has even done something it hasn't done in over 20 years.

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Nine consecutive days of winning

On Tuesday, April 22, 2025, the S&P 500 began to rise. And rise and rise. As of the market close on Friday, May 2, the index had posted nine consecutive days of increases.

Such a streak is highly unusual for the S&P 500. The S&P has experienced plenty of seven-day and eight-day stretches of consecutive gains, but hitting nine days has proved to be elusive this century. The last time it happened was in November 2004.

What's behind the S&P 500's momentum? The Trump administration's relaxation of its aggressive trade policy has been the primary catalyst. On April 9, the White House announced it was delaying the implementation of steep reciprocal tariffs on imports from most countries. Reports that the administration was in trade discussions with multiple countries also gave investors some reason for cautious optimism.

An unexpectedly positive jobs report on Friday helped, too. The U.S. economy added 177,000 jobs in April. While that number was lower than the 185,000 jobs gained in March, it was still well above the 135,000 expected by economists surveyed by FactSet.

How stocks have performed following such streaks in the past

The S&P 500 has existed in its current form with 500 companies since March 1957. Since then, the index has experienced 23 previous winning streaks of nine days or more. How have stocks performed following such periods in the past? It's a mixed bag.

Let's look at the most recent example when the S&P 500 rose for nine consecutive days back in 2004. The good times continued for a while. However, six months after the run ended on Nov. 5, 2004, the index was up -- but only by a meager 0.55%.

^SPX data by YCharts

There have been cases where an impressive hot streak led to double-digit percentage gains, though. For example, the S&P 500 wrapped up another nine consecutive days of increases on Aug. 26, 1970. Six months later, the index had soared more than 19%.

^SPX data by YCharts

On the other hand, the S&P 500's hot streaks have also sometimes been followed by significant declines. As a case in point, the index wrapped up 11 consecutive days of gains on June 22, 1987. Six months later, a period that included the infamous "Black Monday" stock market crash, the S&P was down more than 19%.

^SPX data by YCharts

The S&P 500 was up six months after the completion of nine or more consecutive days of increases 13 times since 1957. It was down six months after similar winning sprees 10 times.

History isn't always a guide

If history is any guide, investors have more reason to expect stocks to improve in 2025 than they have to expect stocks will decline. However, history isn't always a guide.

What happens next with stocks will depend heavily on what happens with tariffs. Maybe the U.S. will strike trade deals with other major countries that minimize the negative economic impacts. Twelve states and several organizations representing businesses have sued the Trump administration, arguing that levying the tariffs exceeds the president's legal authority. Perhaps the federal courts will halt the tariffs as a result of this litigation.

There's also a real possibility that the delayed reciprocal tariffs eventually go into effect. Many economists project this would cause inflation to surge. Some believe the U.S. economy could slip into a recession. The S&P 500 would be highly unlikely to flourish under those conditions.

The bottom line is that investors should be prepared for anything over the short term. But over the long term, the S&P 500 has always risen. It's important to be prepared for that probable future outcome, too.

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Keith Speights has no position 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.