What happened last time? › Inflation
What happens during deflation (prices falling over a year)?
It has happened 16 times since 1914. A year after it began, the S&P 500 was up 6 of 12 times, with a median move of -1.7%. On an ordinary day in the same years the median was +9.4%, up 69% of the time.
CPI inflation below 0% a year. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +3.4% 58% up · n 12 · normal +1.1% | -1.7% 50% up · n 12 · normal +9.4% | +2.4% 50% up · n 12 · normal +25.7% |
| Gold | -0.9% 33% up · n 3 · normal 0.0% | +5.6% 100% up · n 3 · normal +2.9% | +9.9% 100% up · n 3 · normal +10.4% |
| Oil | +2.5% 67% up · n 3 · normal 0.0% | +8.6% 67% up · n 3 · normal 0.0% | +54.0% 100% up · n 3 · normal +8.9% |
| 10-year yield (pts) | +0.15 pts 75% up · n 4 · normal +0.01 pts | +0.18 pts 50% up · n 4 · normal +0.09 pts | +0.98 pts 75% up · n 4 · normal +0.06 pts |
| Inflation, CPI y/y (pts) | -0.00 pts 33% up · n 9 · normal 0.00 pts | +1.26 pts 63% up · n 16 · normal -0.00 pts | +2.31 pts 69% up · n 16 · normal -0.04 pts |
| Unemployment rate (pts) | -0.10 pts 40% up · n 5 · normal 0.00 pts | -0.60 pts 20% up · n 5 · normal -0.20 pts | -1.60 pts 0% up · n 5 · 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
- 2015-10-15 · true for 23 trading days · S&P 500 a year later: +5.4%
- 2015-02-26 · true for 98 trading days · S&P 500 a year later: -7.7%
- 2009-04-15 · true for 171 trading days · S&P 500 a year later: +42.2%
- 1954-10-18 · true for 252 trading days · S&P 500 a year later: +30.9%
- 1949-06-15 · true for 325 trading days · S&P 500 a year later: +36.2%
- 1940-10-16 · true for 24 trading days · S&P 500 a year later: -10.3%
- 1940-02-15 · true for 26 trading days · S&P 500 a year later: -22.4%
- 1938-04-16 · true for 453 trading days · S&P 500 a year later: +4.2%
- 1936-05-16 · true for 50 trading days · S&P 500 a year later: +10.6%
- 1930-06-16 · true for 1038 trading days · S&P 500 a year later: -33.6%
- 1930-03-18 · true for 49 trading days · S&P 500 a year later: -25.5%
- 1928-11-15 · true for 174 trading days · S&P 500 a year later: -11.9%
- 1926-08-16 · true for 647 trading days · S&P 500 a year later: –
- 1924-08-15 · true for 125 trading days · S&P 500 a year later: –
- 1921-02-15 · true for 649 trading days · S&P 500 a year later: –
- 1915-09-15 · true for 50 trading days · S&P 500 a year later: –
- 16 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.
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 when core inflation is above 4%?