S&P 500 Performance Predictions for 2024

Historical data suggests that the movement of the S&P 500 during the first five trading days of the year can serve as a reliable indicator for its overall performance throughout the rest of the year. However, if this trend continues, it may not bode well for stocks in 2024.

According to Dow Jones Market Data, the performance of the large-cap U.S. equity benchmark, the SPX, has historically correlated with its performance over the full year in the same direction approximately 69% of the time since 1950. This correlation has been even stronger in election years, occurring around 83% of the time. The trend has also proven to be accurate in eight out of the last 12 years and in 14 out of the last 16 presidential election years.

Interestingly, the S&P 500 is currently showing a decline of 1.8% over its first four trading days, based on FactSet data. The last time the index experienced a loss of 1% or more within its first five trading days (in 2022), it ended up losing a significant 19.44% for the entire year.

On the other hand, when the S&P 500 has seen gains within the first five trading days, it has historically recorded an average return of 14.2% for the whole year. Conversely, when it has been down during this period, it has only achieved an average return of 0.3% for the full year.

As of Friday, U.S. stocks were mostly trading lower. The Dow Jones Industrial Average (DJIA) was down 0.1%, while the S&P 500 and Nasdaq Composite (COMP) experienced minor losses of less than 0.1% and 0.2%, respectively.