The S&P 500 climbed 0.7% to 7,722.72 on Oct 4, 2026, even as swelling valuations tied to the artificial intelligence trade revive fears of a steep downturn. Market history offers a counterweight: every prior bear market has given way to a new bull run that carried the index to fresh highs.
S&P 500 climbs as AI valuation worries build
The S&P 500 gained 56.27 points to close at 7,722.72, a 0.7% advance. Yet the same rally has pushed the market to valuation levels last seen before the dot-com bubble burst, according to Motley Fool analyst Reuben Gregg Brewer.
According to Reuben Gregg Brewer: "may have never experienced a really deep and prolonged bear market" describes newer investors, unlike those who lived through the dot-com bust or the Great Recession. He writes that the brewing AI bubble could produce a serious downturn, but argues that is no reason to panic.
Every past bear market gave way to new highs
Stocks move in a jagged pattern rather than climbing in a straight line, and bear markets are as normal a part of investing as bull markets, Brewer writes. He points to a long bear market history that shows every downturn in the S&P 500's record has eventually been followed by a new bull market that pushed the index to new highs.
The dot-com crash and the Great Recession, among the worst bear markets on record, now look like mere blips against the index's long-term climb, he adds. Brewer frames that pattern as evidence that a buy-and-hold approach suits long-term investors in S&P 500-tracking funds.
Staying invested matters more than timing the entry
Brewer points to the SPDR S&P 500 Trust and the Vanguard S&P 500 ETF as straightforward ways to own the index, calling the Trust the first ETF ever created. The harder part, he says, is holding either fund through both bull and bear markets rather than selling during the downturns.
Based on that long-run record, Brewer argues an investor who buys at the top of a bull market can still do well over time. He adds that starting to save and invest is probably more important than getting the entry point exactly right.
Source: The Motley Fool
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