On October 5, 2026, the S&P 500 closed just 0.3% below its all-time high, and on October 6 it set a new record close, its 28th so far this year. Over the 12 months through October 5, the index returned 17.1%, including dividends.
Despite all the negative headlines during the third quarter, the Nasdaq Composite, S&P 500, and MSCI All Country World Index (ACWI) ex USA managed to end the quarter with positive gains of 3.15%, 2.25%, and 0.87%, respectively. Meanwhile, the S&P 400 (midcap) and S&P 600 (small cap) indices took a breather from their breakout rally that started in November 2025, declining 5.85% and 7.78%, respectively, for the quarter. The MSCI Emerging Markets index, which has led all major U.S. indices this year, also slowed, returning −0.99% for the quarter (chart below).
For the year, the clear leader is the MSCI Emerging Markets index, up 26.27%, well ahead of the Nasdaq Composite, up 18.76%. Since January 1, 2016, the MSCI Emerging Markets index has substantially trailed U.S. indices, returning 195.1% compared to 356.3% for the S&P 500 and a whopping 503.7% for the Nasdaq Composite. This is a reminder that market leadership has changed over time.
Below is a chart illustrating the total returns of these indices year to date through October 5, 2026.
For anyone nearing retirement, numbers like these raise a fair question, “is the good news already used up?” Here we test two common misconceptions about strong markets against the historical record. What follows is a view of what has happened in other periods of history that rhyme with today. While this is not a forecast, it can help provide context to the current market environment and keep your decisions tied to your plan.
Misconception 1: A record high means a fall is coming
It is easy to read a record as a peak, but history tells a more mixed story, and on balance a more encouraging one.
We looked at every month since 1990 when the S&P 500 ended within 1% of its all-time high, 20 cases in all. In most of them, stocks were higher a year later, and the longer view held up as well. A balanced mix of 60% stocks and 40% bonds (60/40) gave up some upside for a steadier path, and every five-year outcome for that mix in this set was positive.
Records have often been followed by more gains, but the range after any single high was wide, and the worst year still fell by nearly 25%. While we remain bullish on the future of the U.S. economy and stock market, a diversified mix and a reserve for near-term spending matter more than this month's return or the index price the day you invest.
Misconception 2: A big year means a weak one next
After a strong run, many people brace for payback. With the S&P 500 up 17.1% including dividends over the 12 months through October 5, the question is a timely one.
Since 1990, the index has had a 12-month total return of 15% or more 25 times. What followed was usually more growth, not a reversal, and the typical next year was actually a bit better than usual. The longer view held up too, and the 60/40 mix again traded some upside for a steadier path.
What does this mean to me?
Records and strong years make headlines, but on their own they have not been a reliable signal that a pullback in the market is pending. Although the typical return after the S&P 500 closed near a record or gained 15% or more in a year was positive, the range of returns that followed varied widely. This is why a plan built around your income needs, your time horizon and the swings you can live with matters more than any single market reading. If recent gains have you wondering whether your mix still fits, that is a good conversation to have with an advisor who knows your full picture. You can schedule a conversation with Up Capital anytime.
Important Disclosures Up Capital Management is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. The opinions expressed are as of the publication date and are subject to change without notice. This commentary is for informational purposes only and is not individualized investment advice or a recommendation to buy or sell any security. Forward-looking statements involve risks and uncertainties, and actual results may differ. Index figures are for illustration only. Third-quarter figures reflect price change, except the MSCI ACWI ex USA, which reflects total return. Year-to-date, since-2016, and historical figures are total returns, including reinvested dividends. Indexes are unmanaged, do not reflect fees or expenses, and cannot be invested in directly. The 60/40 mix shown is a hypothetical blend of the S&P 500 Total Return index (60%) and the Vanguard Total Bond Market Index Fund (40%), rebalanced monthly. It does not represent any client account or Up Capital Management strategy and does not reflect advisory fees, trading costs or taxes. Historical results are shown as history, not a forecast. Past performance is not indicative of future results. Data are from YCharts, a third-party source believed to be reliable but not guaranteed as to accuracy or completeness. Data are as of October 5, 2026, unless otherwise noted.