27 New Highs and Counting: What the Data Says Comes Next

• The S&P 500 has made 27 new closing highs this year.

• This has happened 18 other times since 1980.

• The index has averaged a 22% return in those prior instances.

Bull markets tend to climb a wall of worry…

It’s hard to believe, but 2026 is almost two-thirds of the way over. Considering all of the turmoil in the financial and political markets, as well as the geopolitical strife, it feels like this year has been far longer. Heck, the technology drop in July alone, felt like it covered a year’s worth of volatility and drama. Yet, despite the angst, the stock market is coming off a fresh high.

Typically, this time of year sees a repetitive pattern in the stock market. After having experienced one its best three-month stretches of any calendar year, the S&P 500 Index sets up for a September swoon. Because, as momentum-driven portfolio managers and traders return from their summer breaks, they tend to reduce positions to lock in returns and begin setting up for the coming year…

That seasonal setup is a real dynamic, but it's not really what's driving the current coverage. Given the recent gains, you’d think the media’s market narrative would be much more constructive. Yet, I feel like each time I open a finance-dedicated website or turn on a similarly focused television channel, the opposite is true. True to form since the pandemic, those outlets appear to be hyper-focused on pending doom. They’ve learned that selling fear provides them with their best chance of getting eyeballs and clicks.

Well, the stock market made a new high for the third time this month on August 13. That also marked the 27th time it has happened during this calendar year. And according to the data, similar scenarios in the past have meant even more gains lie ahead. That should underpin a steady, long-term rally in the S&P 500.

But don’t take my word for it, let’s look at what the data’s telling us…

There’s an old saying that history doesn’t repeat but instead it tends to rhyme. The stock market isn’t much different. Time and again we see the same scenarios play out through the investment cycle. Based on the historical data, this year likely isn’t any different.

As I noted above, August has seen the S&P 500 make its 27th new high this year. So, I wanted to see how that ranks versus other years to see if it’s above or below normal. Based on the closing price going back to 1980, the highest annual total was 77 in 1995 while the lowest tally of zero has happened 15 times. But when we add them up, we find the gauge tends to average 21.5 new closing highs per year. In other words, the 2026 is pacing ahead of the typical year…

Once I established the current year is pacing ahead of the typical year, I checked what the annual returns look like. I went back and tallied the annual numbers in those years based on a closing price basis (no dividends) …

As you can see, there have been 18 years prior in which the S&P 500 has made 27 or more new closing highs. Based on the data, those calendar years have averaged a 21.7% return compared to the 9.7% annualized total return (Dividends reinvested) since 1928. The success rate, or number of times with a positive outcome, is 100%. Considering the index is up 12% so far this year, a typical result would imply there could be another 10% upside before year’s end.

The last data I surveyed was what happened in those years from the middle of August, like the current scenario, moving forward. I ran the numbers on both a 12- and 24-month return basis. The first column shows the 12-month results while the second column displays the 24-month data…

As you’ll notice, the S&P 500 tends to experience a 15.6% gain one year later with an 83% success rate. Over the following two years it has rallied 27%, experiencing a positive outcome 82% of the time.

So, like I said at the start, bull markets tend to climb a wall of worry. And that's exactly what's playing out right now. The media narrative is fixated on doom, the calendar is flashing its usual September warning sign, and 2026 has already delivered a year's worth of drama in a matter of months. Yet none of that has stopped the S&P 500 from notching 27 new highs, pacing well ahead of a typical year.

History says that kind of strength doesn't usually reverse course out of nowhere. It tends to keep climbing, worry and all. The data makes a compelling case that this rally still has plenty of room to run, even if the coverage keeps telling you otherwise.

Five Stories Moving the Market:

The U.S. Securities and Exchange Commission proposed a new regulatory framework for crypto assets, the first ‌major step under U.S. President Donald Trump's administration to give the industry the tailored rules it has long pushed for – Reuters. (Why you should care – the proposal shows the SEC under Atkins is willing to move on crypto rulemaking via its own exemptive authority rather than waiting entirely on Congress, potentially opening the door to tokenizing stocks)

Bank of Israel Governor Amir Yaron kept options open for an upcoming interest-rate decision, saying policymakers are dealing with high levels of uncertainty – Bloomberg. (Why you should care – global central banks are increasingly leaning toward rate hikes)

A selloff in global bonds is driving up borrowing costs for governments, businesses and families across the developed world; bond yields are at 19-year highs, and investors are blaming the rout on everything from the continuing U.S.-Iran conflict, which has stoked inflation worries, to the deluge of tech-company bonds vying for debt funds’ cash – WSJ. (Why you should care – investors remain uncertain about the Federal Reserve Chair Kevin Warsh’s monetary policy intentions)

The Port of Los Angeles, the nation's busiest seaport, notched its ‌second-highest volume for July, boosted by resilient demand for consumer goods and equipment for manufacturing and data center construction – Reuters. (Why you should care – the data point to resilient global supply chains)

U.S. industrial production rose for a second month in July, driven by continued strength in manufacturing tied to business investment; the 0.2% advance in production at factories, mines and utilities followed an upwardly revised 0.3% rise a month earlier, according to Federal Reserve data – Bloomberg. (Why you should care – the steady increase should help to underpin domestic economic growth)

Economic Calendar:

Earnings: ADI, TJX, WOLF

U.K. – CPI for July (2 a.m.)

ECB’s Lagarde (President) Speaks (3:10 a.m.)

U.S. - MBA Mortgage Applications (7 a.m.)

U.S. - Energy Information Administration Crude Oil Inventory Data (10:30 a.m.)

Treasury Auctions $16 Billion in 20-Year Bonds (1 p.m.)

FOMC Meeting Minutes (2 p.m.)

Japan – Exports, Imports for July (7:50 p.m.)

China – PBoC Loan Prime Rate for August (9 p.m.)