The S&P 500 Has Gone 18 Months Without a 10% Drop. Here's How the Next Year Has Gone After Streaks This Long.

The S&P 500 (SNPINDEX:^GSPC) last closed in correction territory on April 28, 2025. It ended the day at 5,528.75, just over 10% under the record close of 6,144.15 it had set on Feb. 19.

Since then, every close has stayed within 10% of a record. In other words, the index has gone more than 380 trading days, or about 18 months, without what investors normally call a correction (a fall of 10% or more from a peak).

Even the 4.36% drop on Nov. 5, when chipmakers and other companies linked to artificial intelligence sold off, left the index only about 6% under its high close of 7,818.93 on Oct. 6.

As I write, the S&P 500 is near 7,520, about 4% under that record. It would take a close below about 7,037 to snap the streak.

A run like this can make an index fund investor wonder if a fall is coming. I looked back through the index's history for every past stretch since 1950 that lasted this long, and found seven. A year after each one reached this length, the index was higher in five of them, with a median gain of around 7%.

That isn't far from how an ordinary year has gone, and I don't think it looks like a warning sign.

Image source: Getty Images.

Only seven stretches have lasted this long

I counted a streak as every session in a row that finished less than 10% under the index's record close through that day, with Yahoo Finance's daily closes (which don't include dividends). Then I measured each past streak from the session when it matched the current run's length.

The early 1950s saw none, because the index remained more than 10% below its 1929 high until May 1954.

Two of the seven reached this length in the 1960s, another two in 1986 and 1992, and the last three in 2014, 2017, and 2022. The shortest began in mid-2020 and ended in February 2022. The longest started in early 1991 and lasted until October 1997, nearly seven years later.

Five of the seven were higher a year later

A year after reaching this length, the S&P 500 was up in five of the seven cases. The largest gain followed the 1986 mark, at around 28%. The smallest followed 1992, at about 6%.

For all seven, the median and the average were both gains of around 7%.

The smaller of the two losses followed January 1960. In the next 12 months, the index dipped by around 2%, a period that included a recession that began that April, according to National Bureau of Economic Research dates.

The year after January 2022 was much worse, with the index dropping about 17%. The Federal Reserve began hiking interest rates that March to fight inflation, and I think rising rates had more to do with that loss than the streak's length did.

But a correction during the year didn't always mean a loss for it. The streak that reached this length in August 2017 ended with a sell-off in early February 2018. Yet the index was still around 19% higher a year after that August mark.

All told, three of the seven streaks ended within the next year. The other four lasted for at least another year.

Is the streak a warning sign?

Notably, the index's ordinary record isn't very different. Using every trading day since 1950 as a starting point, the index ended the next 12 months higher in about 75% of those periods. The median gain in these periods was about 11%, and the average about 9%. Five of seven, by comparison, comes to around 71%. And the long-streak median was a few points lower, while the average lagged by about 3 points, mainly because of 2022.

Sure, seven runs is a tiny sample. Excluding 2022, the average of the other six jumps to around 11%. Gaps that small arguably boil down to which years happened to fall in the group. And a streak's length omits factors likely to matter more in the coming year, such as interest rates and the index's valuation.

So, is an 18-month stretch without a correction a warning sign for a buy-and-hold investor? I don't think so. The years after the past stretches looked a lot like ordinary ones, give or take a few points.

Still, it isn't a bullish signal either. The calm ended within about two months in 1960 and again in 2022. But it lasted years in the 1990s. The length of the streak alone didn't show which was coming.

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.