A bull market is a period of sustained increases in market prices, commonly accompanied by investor optimism. The term is most familiar in stocks, but it is also used for other traded assets. Someone who is “bullish” expects a particular asset or market to rise.
A rising market does not mean every security rises, or that prices increase every day. Temporary declines can occur within a longer upward trend. A bear market describes a sustained decline.
How a bull market is identified
A common stock-market convention is a rise of 20% or more from a preceding low in a broad index. Investor.gov’s definition also refers to a period of at least two months. Analysts can use different rules, so reports should identify the index, starting point and observation dates.
The threshold is a convention, not a law of economics or a promise that the rise will continue. Some historical accounts date a bull market from the earlier low once a recovery is recognized. That date is easier to identify after the event than in real time.
A rebound is different from full recovery
Suppose an index falls from 100 to 80 and later rises to 96. The rebound is 20% because the increase of 16 is divided by the low of 80. Yet the index remains 4% below its earlier peak.
Returning from 80 to 100 requires a 25% gain. This difference arises because losses and recoveries use different starting values. A report of a 20% rebound should not be read as proof that all earlier losses have been recovered.
What can support rising prices?
Share prices reflect expectations about future earnings and the returns investors require for taking risk. Better profit prospects, lower financing costs or greater willingness to hold risky assets can support prices. The Federal Reserve explains how interest rates affect asset prices.
Markets look ahead. Prices can rise before current economic data improve, or fall despite good reported earnings if expectations were even higher. There is no single cause that explains every bull market.
Every completed trade has both a buyer and a seller. Rising prices do not require fewer sellers than buyers by headcount; they reflect the prices at which orders can be matched.
What the label cannot tell readers
A bull-market label does not identify the best purchase date, the eventual peak or a safe time to sell. It does not eliminate company-specific risk or guarantee that an investor’s own holdings will gain. Investor.gov describes these stock-market risks.
It also matters whether a chart shows price return or total return including reinvested dividends, and whether gains are measured before inflation, fees and taxes. The SEC’s performance-claims bulletin explains why the period and basis of a return comparison matter.
Last checked and updated on November 11, 2026 by the MBN editorial team.