Line chart tracking S&P 500 Index performance for one year before and after the end of a recession averaging performances from the 13 previous recessions. Index performance begins near 100 and falls to about 88.5 113 days before the end of the recession. From that low point Index returns climb somewhat steadily, reaching 116.5 by 365 days after recession end.
Sources: Bloomberg and Wells Fargo Investment Institute, as of December 31, 2023. The S&P 500 Index is a market-capitalization-weighted index considered representative of the U.S. stock market. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. Investing in stocks involves risk and their returns and risk levels can vary depending on prevailing market and economic conditions. Recession end dates are as follows: October 1949, May 1954, April 1958, February 1961, November 1970, March 1975, July 1980, March 1991, November 1982, March 1991, November 2001, June 2009, and April 2020.
Key Takeaways
- Stocks have tended to anticipate future economic conditions. As such, markets have typically peaked and troughed before the economy.
- Given that the equity market is likely to anticipate the recovery before the recession ends, we will look for opportunities to add risk.