Q1 Wobbles & The S&P 500: A History

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Beginnings. People make such a fuss. As if a strong start guarantees anything. I’ve started diets, relationships, even learning the ukulele, all with a burst of initial enthusiasm. Where are they now? Gathering dust, mostly. The stock market, it turns out, is much the same. We obsess over January, February, the first quarter, as if it’s a predictor of…well, anything. It’s not, of course. But I’ve been staring at screens for twenty years, and I’ve learned that humans need patterns, even illusory ones.

Which brings us to the S&P 500. It’s looking a bit peaked, shall we say, heading into the close of Q1 2026. Down a few percentage points. Enough to make the interns anxious and the financial news channels gleefully predict doom. It’s always amusing to watch them. They act as if they’ve never seen a down quarter before. As if volatility isn’t, you know, the point.

The Peculiarity of Negative Starts

Over the last half-century, the S&P has stumbled out of the gate about 18 times. Not a great record, admittedly. But here’s where things get interesting. Double-digit losses in a single quarter are rare. Truly rare. It usually takes a global pandemic or a particularly enthusiastic bear market to achieve that level of unpleasantness. 2020, naturally, was one of those times. Everyone remembers the panic. My neighbor, bless her heart, started hoarding canned peaches.

More common – and frankly, more annoying – are these moderate dips. The kind we’re seeing now. Last year, we had a similar wobble. 2022, too. It’s like clockwork. The market gets a little restless, everyone frets, and then…well, then it usually does something completely unpredictable. Which is why I prefer birdwatching.

History’s Hints (and Why I Take Them with a Grain of Salt)

So, what does history tell us? After a rocky first quarter, the S&P has ended the year in the red about eight times in the last fifty years. Not terrible, but not exactly inspiring. In half of those cases, the losses were modest. A few percentage points. The kind of thing you barely notice if you’re not actively checking your portfolio every five minutes, which, I assure you, is not a healthy habit.

But there were exceptions. 2008, of course, was a disaster. A truly spectacular implosion. The kind of event that makes you question all your life choices. I briefly considered becoming a beekeeper. But even the bees seemed stressed that year.

The good news is, more often than not, the market bounces back. Last year, for example, it was down around 4.6% in Q1 and finished the year up a healthy 16.4%. That’s the kind of rebound that makes you feel almost…optimistic. Almost. 2003 was even more impressive. A 3.6% drop in Q1 followed by a 26.4% surge for the year. It reminded me of my Aunt Mildred, who once entered a pie-eating contest and somehow managed to win despite being severely allergic to cherries.

What About 2026?

If history is any guide, the end of 2026 will be better than its beginning. Which is a comforting thought, even if it’s based on a flawed premise. The AI boom is certainly a factor. Everyone’s throwing money at anything with the letters ‘A’ and ‘I’ in it. The “Magnificent Seven” stocks – the ones that seem to control everything – are heavily invested, and that’s keeping things afloat.

But there are headwinds, of course. The situation in the Strait of Hormuz is unsettling, and high oil prices are never good. The U.S. economy is a bit wobbly, and those tariffs could still cause problems. It’s a complex picture, and honestly, I’m starting to miss the canned peaches.

Still, investors have reason to be cautiously optimistic. But the most important driver of stock market performance isn’t history, or even artificial intelligence. It’s the unpredictable, messy, and often irrational behavior of human beings. And that, my friends, is something no chart or algorithm can ever truly predict.

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2026-03-25 11:13