S&P 500 exits longest bear market since 1948. What stock-market history says about what happens next.

By William Watts

The S&P 500 on Thursday closed above the threshold that marked its exit from the longest bear market since 1948.

The large-cap benchmark rose 26.41 points, or 0.6%, to close at 4,293.93 on Thursday, marking a gain of more than 20% from its Oct. 12 low.

Here are some key stats from Dow Jones Market Data:

Under the criteria used by Dow Jones Market Data and many other market watchers, a 20% rise from a recent low signals the start of a bull market while a 20% fall signals the start of a bear market. That means the market is always in either a bull or bear market. Also, the market doesn't hop into and out of either a bull or bear each time it crosses the threshold again. It takes another 10% or 20% move in the opposite direction to change the status.

See: How a hawkish Fed could kill a baby bull-market rally in U.S. stocks

So what does history say about what happens next? A look by Dow Jones Market Data at median and average performance following past bear-market exits, based on data stretching back to 1929, is largely positive for periods from one month to a year (see table below).

But there's a lot of variability. Here's a closer look at what happened after each exit:

The table shows that bear exits usually -- but not always -- lead to durable bull markets.

In One Chart: Why stock-market bulls must beware of 'bogus bear-market bottoms'

As noted earlier by Sam Stovall, chief investment strategist at CFRA, of the 14 bear markets since WWII, only two -- 2000-'02 and 2007-'09 ---- produced exits that saw the S&P 500 quickly slump back into a bear market by declining more than 20%.

See: Here's the main driver of the S&P 500's bull-market rally, according to Fundstrat's Tom Lee

Stocks were boosted Thursday after a rise in first-time jobless claims appeared to reinforce expectations the Federal Reserve will leave rates unchanged when it meets next week.

Stocks eked out another round of gains on Friday. The S&P 500 rising 4.93 points, or 0.1%, to close at 4,298.86, while the Dow Jones Industrial Average gained 43.17 points, or 0.1%, and the Nasdaq Composite ticked up 0.2%.

The Nasdaq exited a bear market on May 8, while the Dow exited its bear on Nov. 30.

Mark Hulbert:What the S&P 500's new bull market tells us about what's to come

-William Watts

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06-11-23 1241ET

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