This Stock Market Signal Says the S&P 500 Could Surge Higher in 2025
The S&P 500 (^GSPC) is down 1% year to date, but that number doesn’t tell the whole story. The index initially advanced 4% as investors anticipated deregulation and tax cuts under President Trump. Instead, the administration shocked Wall Street with aggressive trade policies and the stock market crashed.
Specifically, the S&P 500 began falling in February, when President Trump announced tariffs on imports from China, Canada, and Mexico. The losses persisted throughout March as the administration added new duties on steel and aluminum imports. And the decline reached a low point in early April after President Trump unveiled his “Liberation Day” tariffs.
In total, the S&P 500 on April 8 closed 19% below the record high it reached on Feb. 19. But the market has since staged one of its most impressive comebacks ever. The S&P 500 advanced 19.6% between April 8 and May 16, its 15th biggest gain over any 27-trading-day period in history. And history says that momentum could carry the stock market higher in the coming months.
History says the S&P 500 could soar 24% before the end of 2025
As mentioned, the S&P 500 advanced 19.6% during the 27 trading days between April 8 and May 16. The rebound began when President Trump paused country-specific reciprocal tariffs for 90 days, and the rally continued as the administration offered positive commentary on trade deals and took steps to defuse trade tensions with China.
Importantly, the S&P 500 has only performed better over any 27 trading days 14 times in history, and the index has always moved higher over the next six months, one year, and two years, according to Charlie Bilello at Creative Planning. The following chart provides specific dates and details.
Shown are the S&P 500’s 14 largest 27-trading-day rallies throughout history.
As shown, following the 14 largest 27-day stock market rebounds in history, the S&P 500 returned an average of 21% over the next six months. That implies significant upside before the end of 2025.
Specifically, the S&P 500 closed at 5,958 on May 16. The index will advance 21% to 7,209 by Nov. 16 if its performance aligns with the historical average. That implies 24% upside from its current level of 5,800.
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