What happened last time? › Inflation
What happens when PCE inflation is above 4%?
It has happened 12 times since 1960. A year after it began, the S&P 500 was up 6 of 11 times, with a median move of +11.3%. On an ordinary day in the same years the median was +10.5%, up 75% of the time.
PCE prices above 4% a year. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +0.7% 58% up · n 12 · normal +1.1% | +11.3% 55% up · n 11 · normal +10.5% | +27.3% 55% up · n 11 · normal +27.8% |
| Gold | +1.8% 67% up · n 12 · normal 0.0% | -0.6% 45% up · n 11 · normal +2.9% | +10.3% 64% up · n 11 · normal +10.4% |
| Oil | -3.1% 25% up · n 12 · normal 0.0% | -1.8% 36% up · n 11 · normal 0.0% | +10.0% 55% up · n 11 · normal +8.9% |
| 10-year yield (pts) | +0.03 pts 67% up · n 12 · normal 0.00 pts | -0.47 pts 36% up · n 11 · normal +0.06 pts | -1.36 pts 27% up · n 11 · normal -0.06 pts |
| Inflation, CPI y/y (pts) | +0.02 pts 50% up · n 12 · normal -0.00 pts | +0.17 pts 55% up · n 11 · normal +0.04 pts | -1.55 pts 36% up · n 11 · normal +0.02 pts |
| Unemployment rate (pts) | +0.05 pts 50% up · n 12 · normal 0.00 pts | 0.00 pts 36% up · n 11 · normal -0.30 pts | +1.40 pts 82% up · n 11 · normal -0.70 pts |
Median move after each episode began, how often it rose, and how many episodes had data. "Normal" is the same move from any trading day in the same years.
Every time it happened
- 2026-06-25 · true for 24 trading days · S&P 500 a year later: –
- 2021-06-25 · true for 525 trading days · S&P 500 a year later: -8.6%
- 2008-08-29 · true for 62 trading days · S&P 500 a year later: -19.8%
- 2005-10-31 · true for 22 trading days · S&P 500 a year later: +14.2%
- 2000-08-28 · true for 254 trading days · S&P 500 a year later: -23.3%
- 1990-10-01 · true for 145 trading days · S&P 500 a year later: +23.6%
- 1990-03-01 · true for 62 trading days · S&P 500 a year later: +11.3%
- 1988-10-31 · true for 252 trading days · S&P 500 a year later: +22.0%
- 1988-08-29 · true for 22 trading days · S&P 500 a year later: +33.4%
- 1984-04-02 · true for 82 trading days · S&P 500 a year later: +14.3%
- 1973-05-30 · true for 2655 trading days · S&P 500 a year later: -17.4%
- 1968-09-30 · true for 787 trading days · S&P 500 a year later: -9.3%
- 12 separate episodes: a new one starts after 30 days without a match, so one long selloff counts once.
- Try enough situations and one will look like an edge by chance.
- Macro numbers are as published at the time. Stocks include companies that later died.
- How these numbers are made.
More about inflation
- What happens when inflation is above 3%?
- What happens when inflation is above 4%?
- What happens when inflation is above 5%?
- What happens when inflation is above 6%?
- What happens when inflation is above 8%?
- What happens when inflation is above 10%?
- What happens when inflation is below 1%?
- What happens during deflation (prices falling over a year)?