The stock market isn’t off to a good start to 2026. Multiple issues are weighing on stocks today, including the war in Iran, elevated oil prices, and question marks still loom about just how strong the economy really is. Plus, the market has been hot for multiple years now — it may be overdue for a bit of a pullback.
The first quarter of 2026 is in the books, and the S&P 500 (SNPINDEX: ^GSPC), which encompasses the leading stocks on U.S. markets, is down 4.6%. And that would have been even worse if not for a rally toward the end of March. Given all the concerns in the market and investors clearly feeling bearish this year, is a full-blown market crash inevitable? Here’s what history says.
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When the stock market starts the year poorly, that can be a sign that investors are worried about what lies ahead for the economy. That pessimism and bearishness may persist and weigh down the market for some time, potentially the entire year. But that doesn’t mean it’s always the case. In fact, according to data I’ve collected, it’s not even common for the S&P 500 to do worse in the remaining nine months of the year.
Since 2000, there have been seven times (including this year) that the S&P 500 has declined by at least 4% after the first quarter of the year. Of the previous six times it has happened, only twice did the index go on to perform worse over the next nine months. Once was back in 2022 when inflation-led fears resulted in a widespread crash, and the other was during the Great Recession.
You only need to look back to last year to see how market sentiment changed drastically. Fears related to tariffs resulted in the S&P 500 also falling by around 4.6% through the first three months of 2025, but the index would end up rallying an impressive 22% in the following nine months. That doesn’t mean the same thing will happen again this year, but it’s a good reminder of how quickly the mood can change on Wall Street.
When sentiment is poor and the market is bearish, that can be a prime time to load up on quality stocks. Many large and established companies may face adversity in the short term, but over the long run, they are likely to continue to do well. As long as you’re willing to be patient and buy and hold, investing during a time of uncertainty can lead to significant returns later on.
