In 2023, U.S. stocks have experienced a significant increase, largely driven by a select group of technology companies. While the year-to-date gains for the S&P 500 index indicate a positive trajectory, it only paints a partial picture of the current market scenario, according to Jonathan Krinsky, the technical strategist at BTIG.
According to Krinsky, the median return for shares in the S&P 500 index has only risen by 1.1% this year, which is a far cry from the stunning 16.2% median gain back in 2014 when the benchmark index recorded an overall yearly advance of 11.4% (see chart below).
The Russell 3000, which represents nearly 98% of American equities, tells a similar story. Although it has experienced a negative median return of 2.2% this year, the index has managed to gain 11.3% year-to-date. By contrast, in 2014, the median return for the Russell 3000 was 6.9%, with a yearly gain of 10.4%.
When it comes to the S&P 1500, encompassing all shares in the S&P 500, S&P 400 MID, and S&P 600 SML and covering around 90% of U.S. stocks, the median year-to-date return has been a meager 0.1%, compared to the index’s overall advance of 11.2% this year. In 2014, the S&P 1500 recorded a median return of 8.8% and saw an increase of 10.9%.
Overall, investors in 2023 have found it challenging to overlook the rise in Treasury yields, primarily triggered by the Federal Reserve’s decision to increase interest rates and concerns surrounding a possible recession. Nevertheless, there is still hope that the stock-market rally will continue to thrive.
See: ‘Anxiety’ high as stock market falls, bond yields rise — what investors need to know after S&P 500’s worst month of 2023
A Look at the U.S. Stock Market in October 2023
In conclusion, October proved to be a challenging month for the U.S. stock market, triggering concerns among investors. However, historical data suggests that a potential rally could occur in the fourth quarter, providing some hope for a positive end to the year.
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