By Teresa Rivas
There are plenty of reasons to be nostalgic about the 80s, from big hair to the movie Wall Street -- and stocks' performance.
The S&P 500 roughly tripled in the five-year period spanning the summers of 1982 to 1987, and it is tempting to compare the current setup to that era. In fact, as Evercore ISI strategist Julian Emanuel notes, you need to go back that far to find a precedent for how quickly the market has rallied back from its Iran War worries: "There really aren't enough superlatives to describe these 28 days since the pivotal March 30 low," he wrote in a note over the weekend. "The Bull Run has been nothing short of historic, conjuring up memories of 1982."
Using the Relative Strength Index, a popular technical momentum metric, Emanuel shows that it took only a dozen days for the S&P 500 to go from oversold to overbought this month: That's whiplash even by current speedy standards, considering that it took the index 28 days to traverse that trough-to-peak last year after the April 2025 Liberation Day tariff announcement. It took months for that cycle to play out after the Covid-19 lows in spring 2020, a pattern that held during the lows following the financial crisis, the tech bubble, and the Black Monday crash, in 2009, 2002, and 1987, respectively.
In fact, Emanuel notes, the only equivalent is from 1982, when the S&P 500 went from oversold conditions to overbought in just seven trading days.
The good news is that in that case, stocks soared 69% from their August trough over the next 14 months; translated to today's prices, an equivalent move would put the S&P 500 at 10,675 by June 2027.
The bad news is that just like your fax machine, a lot of the key components of that rally aren't around today.
Unlike today, the summer of 1982 followed secular peaks in both inflation and interest rates, "driven by the GOAT Central Banker, Paul Volcker, correcting a decade of Fed subservience to politics with his fierce independence, uncomfortable but accepted by President Ronald Reagan," Emanuel writes. That's a far cry from today, when the Federal Reserve's independence is under attack and rate cuts appear unlikely in the near term.
Also working against the 1982 analogy is the bond market's recent bearish trends, inflation's uncertain trajectory, and the fact that stock valuations are hovering above 20 times forward earnings for the S&P 500, compared to the bargain multiples that resulted from the declines of the 1970s.
Likewise, oil prices were on the rally's side, whereas Emanuel warns that if West Texas Intermediate spikes above $120 per barrel or remains above $90 for a prolonged period beyond July 4, it "will cause lasting damage to stocks and the economy." Oil's ability to kill the bull market is worrisome enough that those two scenarios could lead the S&P 500 to retest its March 30 lows or even pull back to its decade-long support level of 5,500. By contrast, if WTI falls back below the post-spike trough of $76.73 and remains there, that could open the door to 1982-style gains.
His best guess is somewhere in the middle, with WTI falling to the mid-$80 range before July 4, and the S&P 500 ending 2026 at 7,750.
That may be less impressive than 1982, but it's much better than even seemed feasible just a few weeks ago, with the market in the grip of wartime fears. And investors won't have to devote as much of their profits to hairspray.
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 27, 2026 15:09 ET (19:09 GMT)
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