On Wednesday, the S&P 500 index experienced a significant decline of 1.4%, breaking a remarkable streak of 47 consecutive sessions without a drop exceeding 1%. This sudden downturn came as a response to negative news regarding a sharp increase in private-sector payrolls and a downgrade of the U.S. credit rating.
Rare Instances of Minimal Volatility
According to data provided by Toggle AI, there have only been 10 instances since 2005 in which the market maintained such minimal volatility for a period ranging between 45 and 50 days. Interestingly, these lulls in volatility have often been followed by positive outcomes.
Positive Outcomes Following Periods of Minimal Volatility
Historically, during similar periods of minimal volatility, investors have witnessed promising results. Over the subsequent month, the market experienced an average gain of 1.2%, followed by a six-month rise of 4.4% and a 12-month increase of 10%.
Consistently Positive Performance
Over a longer time frame of 12 months, the market has experienced positive growth 90% of the time, with the sole exception being a minor decline of 1%. The best performance during this period resulted in an impressive gain of 17%.
Strong Performance in 2021
Considering the overall performance this year, the S&P 500 index has already achieved a substantial gain of 18%. Remarkably, even the most optimistic forecasts on Wall Street anticipate the index reaching as high as 4,900 points. This would represent an additional increase of 9%.
Stay tuned for further developments in the market as investors closely monitor the ongoing trends and factors influencing stock performance.