Fundstrat Chief Investment Officer Tom Lee urged investors to "Buckle up" for a potential stock market rally, pointing to a historical S&P 500 setup that indicates a strong fourth quarter. Commenting on mid-year market performance statistics, Lee stated in a post on X that the "4Q looking good."

Current Market Setup and Q3 Gain

Lee highlighted analysis from financial tracking account OddStats, which maps S&P 500 performance following specific mid-year returns. The data isolates instances where the index achieved a second-quarter gain of roughly 14% or higher alongside a positive third-quarter return.

In the current market setup for 2026, the S&P 500 posted a 14.87% return in the second quarter. This was followed by a positive third-quarter gain of 2.03%, as the index climbed from 7,499.36 points on June 30 to close at 7,651.54 points on Sept. 30.

OddStats noted that barring a spectacular crash late in the quarter, the index successfully completed this sequence entering the fourth quarter.

Read Also: Tom Lee Says Cooling Inflation Could Give US Fed Room to 'Walk Back Hawkishness' — and That's 'Good For Stocks'

Flawless Historical Track Record

Data compiled from stooq.com demonstrates that every historical instance matching these specific criteria since 1935 has resulted in positive fourth-quarter returns. Occurrences of this pattern show positive S&P 500 returns across all six previously recorded years:

  • 2020: A 19.95% second-quarter return and an 8.47% third-quarter return were followed by an 11.69% fourth-quarter gain.
  • 2009: A 15.22% second-quarter return and a 14.98% third-quarter return preceded a 5.49% fourth-quarter rise.
  • 2003: A 14.89% second-quarter return and a 2.20% third-quarter return yielded an 11.64% fourth-quarter gain.
  • 1997: A 16.91% second-quarter return and a 7.02% third-quarter return led to a 2.44% fourth-quarter increase.
  • 1938: A 36.00% second-quarter return and a 5.88% third-quarter return resulted in a 7.92% fourth-quarter gain.
  • 1935: A 20.78% second-quarter return and a 13.29% third-quarter return delivered a 15.88% fourth-quarter gain.

How Has the Stock Market Performed in 2026?

The S&P 500 index has advanced 11.56% year-to-date. Similarly, the Nasdaq Composite index was up 15.60%, and the Dow Jones gained 5.22% YTD.

On Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq-100, respectively, closed mixed. SPY fell 0.21% to $762.63, while QQQ rose 0.25% to $739.77. Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), ended 0.84% lower at $508.55.

In premarket trading on Thursday, SPY was up 0.38%, QQQ rose 0.53%, and DIA was 0.38% higher.

Read Also: S&P 500 Could Deliver Another 6% by Year-End as JPMorgan Calls Bears an ‘Extinct Species’ — Polymarket Bettors Price 35% Odds

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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