The bear market is finally over. Here's why investors see better days ahead.

Americans' investments are out of the grip of one of the longest bear markets in recent history.

The S&P 500 gained 0.6% on Thursday, pushing the market 20% higher than the trough stocks hit in October, closing at 4,294. That means Wall Street was finally released from the claws of a bear market — when stocks falls 20% or more from a recent high for a sustained period of time — that began in June 2022.

While bear markets are common, the most recent slump marked one of the first major downturns for younger investors, as well as proving especially painful for older workers who saw their retirement investments slide. Last year, Wall Street soured on stocks as the Federal Reserve began a regime of interest rate hikes to battle record-high inflation. 

But the S&P 500 has bucked the bear market by gaining more than 12% this year, as what once seemed like a certain recession never materialized and the job market remained strong. The gains have helped buoy the investment holdings of millions of Americans, who suffered a $3 trillion hit to their retirement accounts last year.

Better days ahead?

"Bottom line, the economy has been very resilient," said Anthony Saglimbene, chief markets strategist at Ameriprise Financial.

"So much negativity was built into the market," he said. "While it's too early to know this for sure, stocks look like they're doing what they normally do when all the negativity has been discounted into the stock market: They start moving higher in anticipation of better days ahead."

The most recent bear market lasted 248 trading days, according to the Wall Street Journal, citing Dow Jones Market Data. By comparison, the average bear market has lasted 142 trading days.

Prior to the most recent downturn, investors suffered a short-lived bear market at the start of the pandemic, when stocks plunged more than 20% from February 19, 2020, through March 23, 2020, then regained their footing and hit new highs.

With reporting by the Associated Press.

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