S&P 500 falls 4.4%: history suggests big drops have often been buying opportunities
The S&P 500 fell 4.4% on Thursday, its biggest one-day drop since April 2025. Data going back to 1952 show that after such declines the index has, on average, outperformed over the following week, month and three months.
Summary
The S&P 500 fell 4.4% on Thursday, its biggest one-day decline since April 2025. Before that, the index had seen 56 one-day drops of at least 4% since 1952.
What happened after big drops?
Those 56 cases show the market has, on average, done better than usual after such declines:
| Period | Average after a 4%+ drop | Average, all periods |
|---|---|---|
| Next week | 1.0% | 0.2% |
| Next month | 2.0% | 0.8% |
| Next 3 months | 6.7% | 2.2% |
In other words, the average three-month return after these drops was more than three times the historical average.
Points to keep in mind
- These are averages; in some cases (such as 2008) the declines continued.
- The cause matters: a drop driven by a temporary shock behaves differently from one driven by recession.
- Risk management and stop losses are essential in volatile markets like this.
Possible market impact
- US indices: History points to a possible rebound, but high volatility may persist.
- Gold and the dollar: If risk appetite returns, demand for safe havens could ease. Gold daily analysis
Source: S&P 500 historical data since 1952.
Past results do not guarantee future results. This article is news and education, not trading advice. Questions? Support at @fibonacci_chart.
Forex and CFD trading carries a high level of risk due to leverage and you may lose more than your initial capital. Content on this site is educational and not investment advice.
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