Will US stocks continue to rise in Q4? The answer is hidden in historical data

The US stock market has performed strongly in the first nine months of 2024, and if history is any indication, it may continue to rise in the next three months. According to data from Dow Jones Market Data, the S&P 500 typically continues to climb in the fourth quarter when it has risen more than 20% in the first nine months of the year. The S&P 500 has risen more than 20% in the first nine months of the year 10 times since 1950, including 2024. In the previous nine instances, the S&P 500 averaged a 2.1% rise in the fourth quarter, with a median return of 4.1%. In more than 77% of those cases, the S&P 500 continued to rise in the fourth quarter. Notably, there were two years when the S&P 500 performed poorly in the fourth quarter, including 1987, when the "Black Monday" sell-off occurred in October. Even so, the S&P 500 still rose slightly by 2% that year. Other stock market indicators also show a similar pattern, including the Dow Jones Industrial Average and the Nasdaq Composite. The Dow has risen more than 10% in the first nine months of the year 29 times since 1950, including 2024. In those 29 instances, the Dow continued to rise in the fourth quarter in 23 cases (excluding six years), with a median gain of 4.9%. The Nasdaq Composite has risen more than 20% in the first nine months of the year 19 times (including 2024). In those 19 instances, the Nasdaq continued to climb in the fourth quarter in 14 cases, with a median gain of 6.6%. However, as of Thursday, the US stock market has underperformed, and the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average are all poised to record their first weekly decline in a month. If the S&P 500 can maintain its 20% gain since the beginning of the year, 2024 will be the first year since 1998 in which the S&P 500 records positive growth for two consecutive years.