Stock Market Today: Dow, S&P 500 and Nasdaq surge to record close after April CPI reading (2024)

FAQs

What happens when CPI increases to the stock market? ›

A rising CPI may indicate robust economic growth and heightened demand for goods and services, positively impacting the overall stock market. Conversely, a declining CPI might suggest an economic slowdown or potential deflationary pressures, negatively impacting the overall stock market.

Stock Market Average Yearly Return for the Last 30 Years

The average yearly return of the S&P 500 is 10.47% over the last 30 years, as of the end of April 2024. This assumes dividends are reinvested. Adjusted for inflation, the 30-year average stock market return (including dividends) is 7.74%.

YTD return is the amount of profit (or loss) realized by an investment since the first trading day of the current calendar year. YTD calculations are commonly used by investors and analysts to assess the performance of a portfolio or to compare the recent performance of a number of stocks.

S&P 500 1 Year Return is at 20.78%, compared to 27.86% last month and 0.91% last year. This is higher than the long term average of 6.75%. The S&P 500 1 Year Return is the investment return received for a 1 year period, excluding dividends, when holding the S&P 500 index.

The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish).

Stock markets typically aren't moved as much by CPI data, but can be since higher interest rates can cause business activity to slow. In general stock markets prefer a lower CPI that allows consumers to keep spending, and business to continue investing.

Average annual return of the S&P 500

Over the long term, the average historical stock market return has been about 7% a year after inflation. Looking at long periods of time rather than any one year shows something else—remarkable consistency.

Stock Market Historical Returns

40 Years (1982 – 2022): 11.6% annual return. 30 Years (1992 – 2022): 9.64% annual return. 20 Years (2002 – 2022): 8.14% annual return.

So far in 2024 (YTD), the S&P 500 index has returned an average 9.32%.

What is a good annual return in the stock market? ›

A good return on investment is generally considered to be about 7% per year, based on the average historic return of the S&P 500 index, and adjusting for inflation.

In 1980, had you invested a mere $1,000 in what went on to become the top-performing stock of S&P 500 (^GSPC 0.70%), then you would be sitting on a cool $1.2 million today. That equates to a total return of 120,936%. The stock? None other than Gap (GPS 0.57%).

The Consumer Price Index (CPI) is a critical indicator of pricing pressures in an economy and provides a gauge of inflation. Forex traders monitor the CPI, as it can lead to changes in monetary policy by the central bank that will either strengthen or weaken the currency against rivals in the markets.

A higher CPI often means that a less stringent government policy is generally in place. This means that debt is often easier to obtain for cheaper and that individuals have greater spending capacity.

Analysts suggest that the short-term dynamic is less favourable, and that the relationship between equity prices and inflation is (quite frequently) an inverse correlation – ie as inflation rises, stock prices fall, or as inflation falls, stock prices rise.

The CPI is used to adjust wages, retirement benefits, tax brackets, and other important economic indicators. Inflation-protected securities and derivatives contracts based on the CPI can help investors assess and control the risks of inflation and deflation.