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.
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Original headline: Inflation Rose to 3 . 7 % in September . Is It Time to Sell the S & P 500 ?
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Related tickers and likely impact
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% |
DXY
▲ Likely positiveRelevance: medium
| Market | Currencies |
|---|---|
| Close on 10/16/2026 | 101.78 |
| Change that session | -0.20% |
QQQ
▼ Likely negativeInvesco QQQ Trust
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/16/2026 | 709.80 |
| Change that session | -2.50% |
XAU/USD
▲ Likely positiveRelevance: low
| Market | Gold |
|---|---|
| Close on 10/16/2026 | 4,165.63 |
| Change that session | -0.13% |
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- 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.
- Inflation Rose to 3.7% in September. Is It Time to Sell the S&P 500?
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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