Will the S&P 500 Surge in the Second Quarter? The Evidence is Piling Up, and It Paints a Compellingly Clear Picture.

The past month and quarter were rocky ones for investors as they faced a wall of uncertainties – from the potential of artificial intelligence (AI)-driven growth to the future of the war in Iran. The S&P 500 swung from gains on any positive news to losses on any negative signs, and a famous volatility benchmark – the VIX – soared, suggesting that investors were feeling fearful.

As a result, the S&P 500 completed a losing month and quarter, declining 5% and 4.6%, respectively.

But the situation was much brighter just a short time ago. The benchmark extended its bull market run into three years as of October, and over the past three calendar years, it advanced 78%. This was as investors piled into growth stocks, particularly in areas such as AI and quantum computing – they were looking for the next big thing in tech, and many of these tech stocks delivered major rewards, climbing in the double and triple digits. Investors were also optimistic about the lower interest rate environment, as this backdrop makes it easier for companies to borrow and for consumers to spend.

So, now, as we head into a new quarter, it’s reasonable to wonder whether the positive momentum will return or if stocks will continue to struggle. Will the S&P 500 surge in the second quarter, rebounding from recent tough times? The evidence is piling up, and it paints a very clear picture.

Image source: Getty Images.

Three years of gains

First, let’s consider the general situation, from the good times in recent years through the more difficult moments of the past several weeks. As mentioned, the S&P 500 has advanced for three consecutive years, and technology stocks have led the way. Investors piled into companies such as AI chip leader Nvidia, cloud services giant Amazon, and software player Palantir Technologies. These companies, delivering impressive revenue growth, had already started benefiting from AI.

Investors were also bullish on other growth players, as many were well-positioned to benefit from consumer and business spending.

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Then, late last year, investors became more cautious. As the valuations of AI stocks soared, they worried that these levels would not be sustainable – and concern mounted that the AI revenue opportunity, considering the high levels of spending on the technology, could disappoint.

On top of this, questions about the U.S. economy and the pace of interest rate cuts began to weigh on investors’ minds in the early days of 2026. And the war in Iran added to concerns in recent weeks. All of this created a volatile market – and led to a difficult quarter for investors.

Second quarters over the years

Now, as we look ahead to the second quarter, we might ask: Will the S&P 500 rebound and even go on to soar? A look at history shows us that over the past six second quarters, the S&P 500 rose five times.

So, recent history suggests the second quarter in general may be a favorable time for investors – and history also shows us that, after troubles such as the coronavirus market crash in March 2020 and the market declines in April 2025 that followed President Donald Trump’s import tariff announcements, the S&P 500 has quickly recovered.

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Finally, Trump’s words on Tuesday offered investors some clarity about what’s to come in Iran, reducing the uncertainty that’s roiled markets. The president told reporters at a briefing that he expects U.S. military forces to exit Iran within the coming two or three weeks.

All of these elements, together, are positive signs for the S&P 500, suggesting that the major benchmark could break out of the doldrums and soar in the second quarter. But here’s the best news of all: The S&P 500 and quality stocks always have recovered from tough times and climbed over the long term. This means lackluster quarterly performance and short-term turbulence aren’t likely to hold your portfolio back – and as a long-term investor, you may score a major win.