Dow …So how does the market tend to perform in this aftermath24 Feb 2020 20:15
Dow …So how does the market tend to perform in this aftermath
However, despite all the relative carnage being endured by the stock market presently, stocks have a tendency to rebound after a hit of at least 2%, Dow Jones Market Data show.
The last 10 times that the S&P 500 index fell by as much as 3%, for example, it declined 0.27%, on average, in the next trading session. However, the average performance improve dramatically in the following week, month and year, as shown in the table below:
Time frame Performance S&P 500 after it has fallen at least 3% in one day
Day after -0.27%
1 week after 1.83%
1 month after 2.08%
1 year after 12.97%
Meanwhile, the Dow has a similar record.
To be sure, how the market performs in the past is no guarantee of what it will do in the future. On the top of that, an epidemic that gets out of control could lead to unprecedented results for the market and economy. During past epidemics, the market has eventually rebounded, however.