The S&P 500 Just Hit a Record High. History Says It Will Finish 2025 Even Higher.

History shows the S&P 500 tends to hit its high water mark for the year in the fourth quarter. (Michael Nagle/Bloomberg)

The S&P 500 just set a new record high. If history is any guide, it’s unlikely to be the index’s last all-time high for 2025.

On Monday the S&P 500 closed at 6,304, its tenth record high of 2025. Despite nearly entering bear market territory amid trade tensions in April, the index is up more than 7% year to date.

On Tuesday, the market slipped, but only a bit. The S&P 500 was down about 0.3% in midmorning trading, while the Dow was up 0.1%.

Can the rally continue? There are plenty of reasons to be wary of the current bull market. But a simple look at the stock market’s historical returns, suggests it’s rare for a calendar year to set its high water mark as early as July, according to a note Tuesday from DataTrek.

Just a few months ago, few stock market investors were thinking about how many new records they would count in 2025. The U.S. economy seemed to be cooling, while President Donald Trump’s tariff threats seemed on the verge of provoking a trade war.

Somehow, the market has shrugged it all off. Recent economic data suggest a slightly improved picture for jobs and inflation. And, despite the Aug. 1 deadline for new trade deals, Wall Street seems to have settled on a Trump Always Chickens Out, or TACO, attitude which assumes the president won’t actually do anything drastic enough to kill the bull market.

Whatever you make of these arguments, history is on the stock rally’s side. In a note Tuesday, DataTrek looked at what month the S&P 500 hit its calendar year high every year going back to 1980. The results: The market almost always—about three fourths of the time—hits its high for the year in the fourth quarter.

“The S&P has much higher odds of peaking in the final quarter of this year rather than this month,” writes DataTrek co-founder Nicholas Colas.

The explanation is relatively straightforward. The S&P 500 returns about 10% a year on average, so it isn’t surprising that in most years the index gradually drifts upward as the months tick by.

Still the actual results are pretty striking: The index has peaked for the calendar year in December 24 times going back to 1980, in other words, more than half the time. It has peaked four times in October and four times in November. By contrast it has peaked just once in July, once in August, and never in June.

The one previous July peak arrived in 1990—just before Iraq invaded Kuwait that August, a political shock that led the index to finish out the year with a 3% decline.

Five times the market peaked in January—only to tumble from there, finishing those years with average declines of nearly 19%.

Some good news: In the three quarters of calendar years when the market has peaked in the fourth quarter, investors have been handsomely rewarded. Those years boast average full-year total returns of around 20%.

Write to Ian Salisbury at ian.salisbury@barrons.com