The S&P 500 has gone 639 consecutive trading days without a -3% decline.
Here’s the chart:
Let's break down what the chart shows:
The blue line in the top panel is the S&P 500 index price.
The black lines in the bottom panel indicates the number of consecutive days since the S&P 500 experienced a daily move of -3% or less.
The Takeaway: As I write this daily note, the S&P 500 futures are down over 3% after Trump imposed tariffs on most countries around the globe last night.
The last time the S&P 500 experienced a drop this significant was 639 trading days ago, which was during the cost-of-living crisis in 2022.
Since the beginning of the 1990s, there have been 104 days with a change of -3% or less, with most of these down days happening while the market was in a sizeable drawdown.
When examining the S&P 500's forward returns, we find that on days with a decline of -3%, there is only a 55% chance the market will be positive two weeks later.
As we know, big daily moves like this tend to cluster together during periods of market weakness.
And guess what? We are in the middle of a market correction!
While we remain in this type of environment, it continues to argue for caution until we see broad and sustainable strength.
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