The fourth quarter tends to be 'even more bullish' when the S&P 500 has year-to-date gains through the first three quarters, Bespoke found.

The U.S. stock market rose Monday, with one trading day left in the third quarter.

The S&P 500 has rallied so far in 2025 - and it's about to enter its strongest quarter of the year historically, according to Bespoke Investment Group.

"Across all quarters, the S&P has averaged a gain of 2.1%" since its inception in 1928, Bespoke said in a note emailed Monday. The fourth quarter "has been the strongest with a gain of 2.9%."

BESPOKE INVESTMENT GROUP

The U.S. stock market has booked all-time highs this month, with the S&P 500 index SPX climbing around 13% year to date as it nears the end of the third quarter. The fourth quarter tends to be "even more bullish in years when the index was up year-to-date through the first three quarters," according to the Bespoke note.

Since 1928, when the S&P 500 had year-to-date gains heading into the fourth quarter, it has averaged a 4.4% return during the fourth quarter, with gains 83.1% of the time, the firm said.

The S&P 500's fourth-quarter outperformance "only really began to widen over the last 30 years," Bespoke found, as highlighted in the chart below.

BESPOKE INVESTMENT GROUP

The S&P 500 is on track for a fifth straight month of gains, including a third-quarter rise of more than 7% through Monday, according to FactSet data.

With one trading day left in the third quarter, the bull market in U.S. stocks continues, with many investors expecting that the Federal Reserve may keep lowering interest rates after resuming its rate-cutting cycle this month.

Investors this week are monitoring a potential government shutdown that risks disrupting the operations of the Bureau of Labor Statistics, including the release of a closely watched U.S. employment report due out on Friday. Investors are keeping a close eye on the health of the labor market, as the government data on jobs help inform the path of the Fed's rate cuts.

The Fed pointed to downside risks for the labor market when it announced earlier this month that it was cutting its benchmark rate by a quarter percentage point. Meanwhile, the U.S. economy has been expanding, with the Bureau of Economic Analysis on Sept. 25 revising up its estimate for real gross domestic product growth during the second quarter to an annual rate of 3.8%.

The U.S. stock market closed higher Monday, with the S&P 500 gaining 0.3%, the technology-heavy Nasdaq Composite COMP climbing 0.5% and the Dow Jones Industrial Average DJIA edging up 0.1%, according to Dow Jones Market Data.