The U.S. stock market has entered a zone last seen ahead of the 1987 Black Monday crash after the S&P 500 recorded one of its strongest two-month rallies in modern history.
The benchmark index gained about 16% across April and May 2026, matching a level that, according to historical data, has only been exceeded during major recovery periods following recessions.
Excluding recession-driven rebounds, the last comparable surge occurred in 1987, just months before the Black Monday stock market crash.
In this line, data compiled by CNBC and FactSet shows the S&P 500’s two-month gain through May 2026 ranks among the strongest since 1957.
The outlook highlights only a handful of similar rallies, including those in 1975 following the 1973-74 bear market, April 2009 after the global financial crisis, and May 2020 during the post-pandemic recovery. The current advance stands out because it occurred outside a recessionary recovery period.
The latest surge has pushed the S&P 500 to record highs near the 7,600 level, driven largely by technology stocks and continued enthusiasm around artificial intelligence.
S&P 500 2026 rally
April alone marked one of the strongest months on record, with the S&P 500 gaining more than 10%, while the Nasdaq Composite climbed roughly 15%. Strong corporate earnings and growing AI-related investment helped sustain momentum throughout May.
Historical comparisons have emerged because a similarly rapid rally occurred in the months leading up to Black Monday in October 1987, when the market suffered one of the largest single-day declines in U.S. history.
While this does not signal an imminent crash, several stock market correction risks are emerging.
Valuations remain stretched, gains are heavily concentrated in mega-cap technology stocks, and expectations for AI-driven earnings growth are elevated.
Inflation, higher energy prices, geopolitical tensions, and slowing consumer spending could also weigh on sentiment.
Although strong earnings have supported the rally, the market remains vulnerable to a correction if growth disappoints or external shocks materialize.
