What Q1 Performance Means - and Does Not Mean - for the Rest of the Year
Key points:
- Since 1950, the S&P 500 has shown a first-quarter gain 62% of the time
- Following positive Q1s the index showed a positive Q2+Q3 performance 77% of the time versus 46% following negative Q1s
- Following positive Q1s the index showed a positive "Last 9 months of the year" performance 80% of the time versus 50% following negative Q1s
- While the decline for the S&P 500 during the first three months of the year does not guarantee an impending bear market, it does suggest that investors adjust their expectations for the remainder of 2026
Q1 closed with a loss for the S&P 500
The S&P 500 index lost -4.4% during the first quarter of 2026. This is well below the average. A summary of the 1st quarter S&P 500 performance since 1950 appears in the table below. We can see that in the past 77 years, Q1 ended with a gain 62% of the time.
The chart below shows the hypothetical growth of $1 invested in the S&P 500 only in January, February, and March each year, starting in 1950. $1 grew to $3.86.
The real question here is "Does the performance for the 1st qua