What happened last time? › Combinations
What happens in a bear market during an announced recession?
It has happened 5 times since 1980. A year after it began, the S&P 500 was up 4 of 5 times, with a median move of +35.9%. On an ordinary day in the same years the median was +12.2%, up 79% of the time.
S&P 500 more than 20% below its 1-year high · in a recession, as announced by NBER at the time. Not true on 2026-09-25.
What came next
| 1 month later | 1 year later | 3 years later | |
|---|---|---|---|
| S&P 500 | +5.3% 60% up · n 5 · normal +1.3% | +35.9% 80% up · n 5 · normal +12.2% | +52.5% 100% up · n 5 · normal +35.4% |
| Gold | +4.3% 60% up · n 5 · normal +0.0% | +25.3% 100% up · n 5 · normal +3.0% | +34.9% 80% up · n 5 · normal +9.2% |
| Oil | -1.4% 40% up · n 5 · normal +0.3% | -0.3% 40% up · n 5 · normal +0.2% | +90.8% 60% up · n 5 · normal +5.9% |
| 10-year yield (pts) | -0.18 pts 20% up · n 5 · normal -0.02 pts | -1.39 pts 20% up · n 5 · normal -0.18 pts | -0.81 pts 0% up · n 5 · normal -0.59 pts |
| Inflation, CPI y/y (pts) | -0.62 pts 20% up · n 5 · normal -0.01 pts | -3.84 pts 40% up · n 5 · normal -0.08 pts | -0.13 pts 40% up · n 5 · normal -0.36 pts |
| Unemployment rate (pts) | +0.20 pts 100% up · n 4 · normal 0.00 pts | +0.50 pts 80% up · n 5 · normal -0.30 pts | -0.80 pts 20% up · n 5 · normal -0.90 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
- 2008-12-01 · true for 191 trading days · S&P 500 a year later: +35.9%
- 2002-06-21 · true for 198 trading days · S&P 500 a year later: +0.7%
- 2002-05-07 · true for 1 trading day · S&P 500 a year later: -11.4%
- 1982-08-04 · true for 9 trading days · S&P 500 a year later: +52.0%
- 1982-03-05 · true for 9 trading days · S&P 500 a year later: +40.5%
- 5 separate episodes: a new one starts after 30 days without a match, so one long selloff counts once.
- Few episodes: read the ranges and the interval, not just the median.
- 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
- What happens when stocks fall 10% in a month while inflation is above 4%?
- What happens in a bear market when the Fed starts cutting?
- 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?
- What happens when bond yields jump and stocks fall?