It’s been nearly six months since the “liberation day” sell-off in April that sent shockwaves across global financial markets. Since then, stocks have gone to the moon, but they may be due for a re-entry. The S & P 500 is up more than 33% over the past six months. That marks the 12th time since 1953 that the benchmark index has had such a strong performance over that period of time. Expectations of Federal Reserve rate cuts, and protectionist U.S. tariffs enacted in fits and starts rather than swiftly, have boosted stocks. Investors have piled into the artificial intelligence trade, with Nvidia and Meta Platforms soaring 90% and 39%, respectively, over six months. .SPX 6M mountain SPX 6-mo chart But history isn’t in Wall Street’s favor, at least in the short term. Bespoke Investment Group noted that the S & P 500 averages a 1% decline in the week after it records a six-month surge of more than 30%. The benchmark is also positive just 36.4% of the time one week after such a strong performance. The benchmark’s gains further out aren’t as impressive either. The S & P 500 has seen an average advance of just 3.6% three months after soaring 30%+ in six months. In the following six months, it’s up just 5.9% on average. Tom Essaye of The Sevens Report also warned that things could get dicey for stocks if “AI-related earnings disappoint and cause some multiple contraction, the Fed reduces expectations for two more rate cuts this year and economic data begins to roll over.” “This outcome would essentially negate all the reasons for the [year-to-date] rally, and beyond that, raise the prospects of elevated inflation and an economic slowdown,” he said. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
