US consumer prices rose 3.7% in the 12 months through September, up from 3.4% in August, with gasoline up 9.1% in the month and accounting for over half the monthly increase, while core inflation was 2.6%. The S&P 500 fell about 1.1% that day to near 7,719. Using monthly data since 1950, the author found that the index rose 12 months later in about 69% of the 337 months when inflation was at least 3.5%, averaging about 7% gains, versus about 79% and 11% after the 480 months with inflation below 3%. Gains were smaller after hot inflation readings, though the index still rose more often than not. The author argues that this record does not justify selling an index fund over a 3.7% reading, while expecting smaller returns than in tamer periods.
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DXY
▲ Likely positiveRelevance: high
| Market | Currencies |
|---|---|
| Close on 10/16/2026 | 101.78 |
| Change that session | -0.20% |
SPY
▼ Likely negativeSPDR S&P 500 ETF
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/16/2026 | 763.25 |
| Change that session | -1.11% |
QQQ
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Relevance: medium
| Market | US stocks |
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| Sector | ETF |
| Close on 10/16/2026 | 709.80 |
| Change that session | -2.50% |
NVDA
▼ Likely negativeNvidia
Relevance: low
| Market | US stocks |
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| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.2T |
| Close on 10/16/2026 | 214.13 |
| Change that session | -1.43% |
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Related news
- Inflation Rose to 3.7% in September. Is It Time to Sell the S&P 500?
Consumer prices rose 3.7% over the 12 months through September, up from 3.4% in August, with gasoline accounting for much of the jump. On the day of the report, the S&P 500 fell about 1.1% to near 7,719. Using data since 1950, the author found the index rose the following year in about 69% of months when inflation was at 3.5% or higher, with an average gain of roughly 7%, versus about 79% and 11% after readings below 3%. Most of the 337 high-inflation months fell in the 1970s and 1980s, and outcomes depended heavily on timing. The author argues this record does not justify selling an index fund for a long-term holder, but expected gains should be lower.
- Inflation Rose to 3 . 7 % in September . Is It Time to Sell the S & P 500 ?
The consumer price index rose 3.7% over the 12 months through September, up from 3.4% in August, with gasoline prices jumping 9.1% in the month and accounting for over half the increase. Excluding food and energy, prices were up 2.6% from a year earlier. Looking at data since 1950, the author found the S&P 500 rose in about 69% of the 12-month periods following readings of 3.5% or higher, with an average gain of roughly 7%, versus about 79% and 11% when inflation was below 3%. Most of those high-inflation readings came in the 1970s and 1980s, and outcomes depended heavily on timing. Concluding that the record does not justify selling an index fund, the author says he would keep holding but would not expect gains as large as in low-inflation periods.
- Inflation Rose to 3 . 7 % in September . Is It Time to Sell the S & P 500 ?
On Wednesday, Oct. 14, the Bureau of Labor Statistics said consumer prices rose 3.7% over the 12 months through September, up from 3.4% in August, with gasoline up 9.1% in September alone; core inflation was 2.6%, and the S&P 500 slid about 1.1% that day to near 7,719. Using monthly data since 1950, the author finds the index usually kept rising a year after inflation readings of 3.5% or higher, though with smaller average gains of about 7% versus about 11% when inflation was below 3%. Around 6 in 10 of those hot months came in the 1970s and 1980s, and timing mattered: the index was lower a year after every reading from April 2021 through February 2022, but rose after readings near the June 2022 peak. The author says a 3.7% reading alone does not justify selling an S&P 500 index fund for long-term holders, though investors should expect smaller gains.
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The Producer Price Index rose 1.3% in September, its largest monthly gain since March 2022, and is running at an annual rate of 6.3%, far above the roughly 0.6% economists expected. Wholesale energy prices jumped 10.8% and producer-level gasoline surged 20.3%, while final demand goods rose 2.6%, the largest monthly increase since the series began in 2009. Retail sales rose 0.8% in September, but excluding gasoline they increased just 0.2%. The author argues inflation has not been defeated, pointing to a 3.7% CPI reading and cost pressures spreading through the economy.
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Gasoline prices have risen sharply since the U.S. war with Iran began in February, with the average price of regular gasoline at $4.36 in September according to the EIA. The Get the Facts Data Team built a gas price calculator that uses the EIA's monthly national average to show how many gallons the amount you normally spend at the pump buys now compared with before this year's price changes. The BLS reported the gasoline index rose 34.2% year over year in September, and a 9.1% monthly surge in the index accounted for over half of the month's overall increase. Overall inflation worsened to 3.7% year over year last month as the ongoing U.S. war with Iran keeps oil prices elevated.
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