The U.S. stock market enters the next 12 months with a notable technical tailwind, but the backdrop is becoming more complicated. The S&P 500 remains in a long-term uptrend, while improving corporate earnings expectations could provide additional support; however, rising government bond yields, higher energy prices and geopolitical uncertainty are creating conditions that could make future returns less predictable.

A Long-Term Trend Still Supports the Market

The S&P 500’s 200-day moving average has increased for 329 consecutive trading sessions, according to strategists at The Kobeissi Letter. That represents the fourth-strongest streak over the past decade. Including a previous 460-session advance that ended briefly in April 2025, the combined period approaches 800 sessions, making it one of the longest sustained upward trends since 1990.

Historical data cited by the strategists also provide a constructive reference point. Since 1999, periods in which the 200-day moving average has been rising have been associated with an average annual S&P 500 gain of 8.5%. While historical performance cannot determine future returns, the pattern suggests that a persistent long-term trend has generally been accompanied by positive market performance.

Earnings Provide an Important Fundamental Support

Technical momentum is being reinforced by expectations for continued corporate earnings growth. JPMorgan strategist Mislav Matejka said weekly earnings-per-share revisions are improving and have become net positive across key regions, pointing to an underlying backdrop of upward earnings momentum.

That dynamic could support equities if economic activity remains resilient. It also creates an important distinction between a market experiencing a temporary correction and one undergoing a broader deterioration in fundamentals. If corporate profits continue expanding, periods of weakness could potentially be absorbed more effectively by investors.

At the same time, stronger earnings expectations do not eliminate valuation or macroeconomic risks. Future returns could be more moderate if higher financing costs begin to weigh on economic activity or corporate valuations.

Bond Yields, Oil and Geopolitics Raise the Risk Profile

The principal challenge is increasingly coming from outside the equity market. A global government bond sell-off has pushed the 10-year U.S. Treasury yield to its highest level since 2023, while the 30-year yield is approaching a two-decade high. Higher long-term yields can place pressure on equity valuations by increasing borrowing costs and raising the relative attractiveness of fixed-income assets.

Energy prices are adding another layer of uncertainty. Crude oil has moved above $90 a barrel amid escalating tensions involving Iran and concerns surrounding transportation through the Strait of Hormuz. Goldman Sachs has warned that oil could reach $120 if disruptions in the strait result in broader transportation blockages.

What Investors Should Watch Over the Next 12 Months

The outlook therefore remains constructive but increasingly dependent on several variables. Corporate earnings, Treasury yields, inflation, oil prices and geopolitical developments are likely to determine whether the S&P 500 can extend its long-running advance or enters a period of more muted returns.

A continued rise in the 200-day moving average would preserve an important technical signal, while deteriorating earnings revisions or a sustained increase in bond yields could challenge that trend. For global investors, including those monitoring Israeli markets, currency movements and geopolitical risk premiums will also remain important considerations. The historical record points to the possibility of further gains, but the next phase of the cycle may require a greater balance between earnings optimism and increasingly significant macroeconomic risks.