What happened last time? › Combinations
What happens when stocks hit a record high with inflation above 4%?
It has happened 13 times since 1927. A year after it began, the S&P 500 was up 9 of 13 times, with a median move of +6.1%. On an ordinary day in the same years the median was +9.4%, up 69% of the time.
S&P 500: % below its all-time high above -0.01 · CPI inflation 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 | +1.2% 62% up · n 13 · normal +1.1% | +6.1% 69% up · n 13 · normal +9.4% | +26.1% 92% up · n 13 · normal +25.7% |
| Gold | -0.7% 46% up · n 13 · normal 0.0% | -1.7% 31% up · n 13 · normal +2.9% | +3.6% 62% up · n 13 · normal +10.4% |
| Oil | -0.3% 31% up · n 13 · normal 0.0% | 0.0% 46% up · n 13 · normal 0.0% | -9.4% 38% up · n 13 · normal +8.9% |
| 10-year yield (pts) | +0.13 pts 62% up · n 13 · normal +0.01 pts | +0.48 pts 62% up · n 13 · normal +0.09 pts | -1.29 pts 31% up · n 13 · normal +0.06 pts |
| Inflation, CPI y/y (pts) | -0.15 pts 25% up · n 12 · normal 0.00 pts | -0.50 pts 46% up · n 13 · normal -0.01 pts | -1.64 pts 15% up · n 13 · normal -0.04 pts |
| Unemployment rate (pts) | +0.10 pts 67% up · n 12 · normal 0.00 pts | -0.10 pts 38% up · n 13 · normal -0.20 pts | +0.50 pts 54% up · n 13 · normal -0.40 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
- 2021-10-21 · true for 17 trading days · S&P 500 a year later: -17.5%
- 2021-06-10 · true for 29 trading days · S&P 500 a year later: -8.0%
- 1991-08-06 · true for 5 trading days · S&P 500 a year later: +8.1%
- 1991-02-13 · true for 11 trading days · S&P 500 a year later: +12.1%
- 1990-07-16 · true for 1 trading day · S&P 500 a year later: +3.4%
- 1990-05-29 · true for 5 trading days · S&P 500 a year later: +6.1%
- 1989-10-03 · true for 5 trading days · S&P 500 a year later: -12.2%
- 1989-07-26 · true for 8 trading days · S&P 500 a year later: +5.3%
- 1985-01-21 · true for 2 trading days · S&P 500 a year later: +17.4%
- 1983-01-06 · true for 2 trading days · S&P 500 a year later: +16.5%
- 1982-11-03 · true for 2 trading days · S&P 500 a year later: +14.4%
- 1980-07-17 · true for 25 trading days · S&P 500 a year later: +7.7%
- 1968-09-24 · true for 20 trading days · S&P 500 a year later: -6.9%
- 13 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 combinations
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- What happens in a bear market when the Fed starts cutting?
- What happens in a bear market during an announced recession?
- What happens in a bear market with no recession announced?
- What happens when the yield curve is inverted and unemployment is rising?
- What happens when oil rises 50% in a year and inflation is above 5%?
- What happens when the VIX is above 40 and the Fed has just cut?
- What happens when gold rises while stocks fall?