What it is
A bull market is characterized by a prolonged period of rising stock prices, generally accompanied by optimism, investor confidence, and economic growth. While there's no official definition, it is commonly understood as a gain of 20% or more from recent lows in a broad market index, such as the S&P 500, often over a period of several months or years. Bull markets are typically fueled by strong corporate earnings, robust economic data, and favorable monetary policy.
During a bull market, investor demand for stocks is high, leading to upward price momentum and often lower volatility compared to bear markets. This environment encourages investment and can lead to significant portfolio growth for long-term investors. News coverage often highlights new all-time highs, strong earnings reports, and positive economic forecasts. Retail investors often feel more comfortable investing during bull markets, though risks of overvaluation can emerge.
Why it matters
Understanding a bull market helps you identify periods of general market growth and investor optimism, guiding decisions about portfolio allocation and risk tolerance.
Reviewed under editorial standardsUpdated September 26, 2026Not investment advice