Will US stocks continue to rise in the fourth quarter? The answer lies in historical data
In 2024, the U.S. stock market has shown strong performance in the first nine months. Historical data shows that when the S&P 500 Index rises by more than 20% in the first nine months, the fourth quarter usually continues to climb. Since 1950, the S&P 500 has averaged a 2.1% increase in this scenario, with a median return of 4.1%. The Dow Jones and NASDAQ indices also exhibit similar trends. Despite the recent weak performance in the stock market, if the S&P 500 maintains a 20% increase, 2024 will be the first consecutive two years of positive growth since 1998
According to the information obtained by Zhitong Finance APP, the US stock market has shown strong performance in the first nine months of 2024. If history can be used as a reference, the next three months may continue to maintain an upward trend. According to Dow Jones market data, when the S&P 500 index rises by more than 20% in the first nine months, the fourth quarter usually continues to climb.
Since 1950, there have been a total of 10 instances where the S&P 500 index has risen by more than 20% in the first nine months of the year, including 2024. In the previous 9 instances, the S&P 500 index has averaged a 2.1% increase in the fourth quarter, with a higher median return rate of 4.1%. In over 77% of cases, the S&P 500 has continued to rise in the fourth quarter.
It is worth noting that there were two years where the S&P 500 performed poorly in the fourth quarter, one of which was in 1987 when the "Black Monday" sell-off occurred in October. However, even in that year, the S&P 500 still saw a slight increase of 2% in the fourth quarter.
Similar patterns are observed in other stock market indices, including the Dow Jones Industrial Average and the NASDAQ Composite Index. Since 1950, there have been 29 instances (including 2024) where the Dow Jones Industrial Average has risen by more than 10% in the first nine months of the year. Out of these 29 instances, in 23 cases (excluding 6 years), the Dow Jones index continued to rise in the fourth quarter, with a median increase of 4.9%.
The NASDAQ Composite Index has seen more than 20% growth in the first nine months on 19 occasions (including 2024). Out of these 19 instances, the NASDAQ index continued to climb in the fourth quarter in 14 cases, with a median increase of 6.6%.
However, as of Thursday, the US stock market has shown weaker performance, with the S&P 500 index, NASDAQ Composite Index, and Dow Jones Industrial Average all likely to experience their first weekly decline in a month. If the S&P 500 index can maintain its 20% increase year-to-date, 2024 will be the first year since 1998 that the S&P 500 has recorded positive growth for two consecutive years