Has the Market Come Too Far, Too Fast?
October 10, 2025
After a strong 30%-plus rebound from the market lows of April 2025, many investors are asking the same question: Can the S&P 500 keep climbing?
With slowing job growth, lingering inflation worries, and concerns about economic momentum, it’s easy to understand the hesitation. But before jumping to conclusions, it’s worth zooming out and taking a look at the bigger picture.
From a long-term perspective, U.S. stocks still appear to be in the midst of a secular bull market—a multi-decade period marked by above-average returns that includes smaller cycles of rallies and pullbacks along the way. In fact, history suggests that the current bull market may still have years, if not a decade or more, left to run.
A Century of Bull Markets: What History Tells Us
Market history tends to move in long, sweeping cycles. Since 1925, the S&P 500 has gone through several extended “secular” bull markets—each lasting roughly 20 to 30 years from trough to peak.
In our analysis of market data since the 1920s, the two most recent secular bull markets averaged about 19 years from new highs to their ultimate peaks, and roughly 30 years from the start of a generational low to the next generational top.
If the current cycle, which began after the recovery from the Global Financial Crisis, follows a similar path, the S&P 500 could experience normal corrections in the coming years but still trend upward well into the 2030s.
This analysis isn’t based on price targets or valuation forecasts—it’s simply an observation of long-term market patterns that have repeated across generations.
Are Stocks “Overbought” After the Recent Rally?
Some investors worry that after such a strong run, stocks might have gone too far. It’s true that, on shorter-term trading measures, the market looks somewhat overbought. However, viewed through a long-term lens, it’s not near historical extremes.
Looking at nearly a century of inflation-adjusted S&P 500 returns, the market currently sits about 28% above its long-term trend line—a level well below what was seen in the late 1990s tech bubble or even the 1950s and 1960s bull markets.
In other words, while valuations are elevated, the long-term trend doesn’t appear dangerously stretched. The market may be due for a breather—but not necessarily a breakdown.
The Tech Question: Then and Now
No discussion of the current market would be complete without mentioning the surge in large-cap growth and technology stocks.
Comparing today’s AI-driven rally to the dot-com boom of the late 1990s provides some perspective. If we align both periods from their respective innovation triggers—Netscape’s web browser debut in 1994 and the release of ChatGPT in late 2022—the Nasdaq Composite’s performance today looks far more restrained than the dot-com run-up.
That suggests the current enthusiasm for artificial intelligence, while powerful, hasn’t reached the euphoric levels that often mark the end of a speculative cycle.
What Could Influence the Next Phase
Market pullbacks are part of every bull market’s DNA. Historically, the S&P 500 has declined by 15% or more roughly every three years and by 20% or more about every five years. These dips can be triggered by any number of factors—policy uncertainty, global conflicts, or slowing economic growth.
However, some headwinds are already shifting toward tailwinds. The Federal Reserve began cutting interest rates in September and has hinted at further reductions into 2026 if economic conditions warrant. Lower rates could support both equity valuations and investor sentiment in the months ahead.
Yes, valuations remain higher than the long-term average—around 22 times forward earnings, versus a 30-year average of 17. But the makeup of the market has evolved: technology now represents about one-third of the S&P 500, while lower-valuation sectors like energy and financials have shrunk. When adjusted for this shift, today’s valuations may be less alarming than they appear at first glance.
If corporate earnings, particularly in technology and AI-related sectors, continue to outperform expectations, those valuations could naturally moderate over the coming year.
The Long View: Staying Invested Through the Noise
Long-term investors who benefited from past generational bull markets—whether in the 1950s–60s or the 1980s–90s—had to weather numerous recessions, rate hikes, inflation scares, and geopolitical crises along the way. Yet those who stayed invested through the turbulence ultimately captured decades of compounding growth.
The same may prove true today. The current bull market won’t rise in a straight line, but history suggests it may have further to go before reaching its eventual peak.
The Bottom Line
Markets rarely move without a pause, and a pullback at this stage wouldn’t be unusual. But when viewed in context, the long-term trend for U.S. equities still appears constructive.
For investors, the takeaway is simple:
Stay diversified, stay disciplined, and don’t let short-term volatility derail a long-term plan.
At Olde Raleigh Financial Group, we help clients maintain that long-term perspective—through every market cycle.
Sources:
https://www.fidelity.com/learning-center/trading-investing/why-the-bull-market-may-have-years-to-run
Disclosure:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
This material is provided as a courtesy and for educational purposes only.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.