The S&P 500 Just Went Up 9 Days in a Row. Here's What History Says Happens Next.

If you've been investing for any time at all, you know stocks don't go up in a straight line forever. That reality has never been more clear than the last few months as the S&P 500 (SNPINDEX: ^GSPC) fell from its all-time high set in February with losses accelerating in early April.

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The biggest reason for the sell-off last month was President Donald Trump's announcement on April 2 that he would impose a 10% global tariff on imports as well as substantial "reciprocal tariffs" on goods from much of the world. Following the news, the Dow Jones Industrial Average (DJINDICES: ^DJI) fell as much as 18.8% from its recent all-time high. The S&P 500 and Nasdaq Composite (NASDAQINDEX: ^IXIC) fell over 20% from their respective peaks, which briefly put them in a bear market, as many of the indexes' big tech stocks were hit hard by expectations that high tariffs will eat into profits.

Image source: Getty Images.

Stocks staged a historic rally on April 9 when Trump announced a 90-day pause on the reciprocal tariffs for every country except China. They continued to trade up and down for the next two weeks as markets tried to digest the rapid changes in policies.

But in the nine trading days from April 22 through May 2, the S&P 500 did nothing but go up. And it went up a lot. The index gained a whopping 10.2% in those nine days, practically an average year's worth of returns.

It represents the 28th time since 1954 where the S&P 500 has rallied for at least nine straight days. Most of those, however, weren't nearly as strong as the rally we just experienced. Only three other times did the S&P 500 gain more than 6% during a nine-day winning streak -- in 1970, 1997, and 2004. It's the eleventh time it notched a streak of at least eight days for a total gain of 6% or more.

From here, some investors may be expecting a reversion to a mean, while others may be looking for the good times to keep rolling. Here's what history has to say.

Is the worst over?

Amid the ongoing uncertainty in the market, investors may be looking for a good reason to continue buying stocks with confidence. Carson Group's Ryan Detrick may have given it to them.

He dug up the data on the last 10 times the S&P 500 climbed eight straight sessions for a total of more than 6%. He found that more often than not, it's just the start of the next market rally.

The S&P 500 is about to be up 8 days in a row and >6% during the win streak.

3 of the past 4 times that happened it was >20% a year later.

Better than avg returns across the board going out a year.

More clues the lows are indeed in and this isn't a bear market rally. pic.twitter.com/6GwkN12P0z

-- Ryan Detrick, CMT (@RyanDetrick) May 1, 2025

When this has happened in the past, the index has posted positive returns 80% of the time over the next one-, three-, and six-month periods. Since the last instance was in Aug. 2024, there are only nine data points for 12-month returns, but seven of them show positive results.

It's also worth pointing out the average returns are relatively high. The index posted an average one-year return of 13.4% following an eight-day rally and a 15.0% median return. That's well above the S&P 500's one-year average and median returns of 9.2% and 10.4%, respectively. And as Detrick points out, three of the last four instances resulted in a rally of more than 20% over the following year.

So, investors looking for a time to get into the market may be looking at a good opportunity right now.

A grain of salt to consider

While Detrick points out some interesting data, it's important to consider there are few data points. What's more, the data don't differ too widely from the average stock market returns over the last 75 years. In other words, the historical data regarding what happens after an eight-day winning streak isn't a good enough reason alone to pour money into stocks.

In fact, there are plenty of reasons to remain cautious about the market. Consumer sentiment is low, gross domestic product (GDP) shrank in the first quarter, and most importantly, it's hard to predict how the government's trade policies might change over the next few months. If there's one thing that can drive stocks lower, it's uncertainty.

On top of that, the S&P 500 is extremely expensive relative to its historical average. And while it's come down from its high prices in February, forecasts for earnings over the next year may come down further over the next month. Analysts are still gathering data from companies as well as macroeconomic data on how Trump's tariffs are impacting businesses and consumers.

But investors who keep their focus on the long run can still find a lot of opportunities in the current environment. Warren Buffett offers great advice for markets like the current one. Don't focus on the impossible-to-predict short-term fluctuations of the economy or changing policies. Instead, focus on businesses with strong long-term profit potential. If you can get a fair price for those stocks, they're worth buying regardless of what's going on in the rest of the market.

The recent winning streak could be a sign of great things to come in the stock market, but you can ignore short-term price movements entirely when investing in great stocks and holding them patiently.

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Adam Levy 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.