How Has the Stock Market Historically Fared During U.S. Recessions?

Executive summary

  • Excluding the pandemic-induced recession of 2020, the correlation between U.S. stock market returns and GDP changes is near zero.
  • In 16 of the 31 recessions that have struck the U.S. since the Civil War, stock-market returns have been positive. In the other 15 instances, returns have been negative.
  • We believe that a diversified, multi-asset portfolio can help investors better weather market drawdowns.

Many investment strategists are forecasting that the U.S. economy could experience a recession in the next year or two. The end of the previous recession, the COVID-19 crisis, was in April 2020. The period from July 2009 to February of 2020, 10 years and eight months, was the longest economic expansion on record.