Traders work on the floor of the New York Stock Exchange following news that the United Kingdom has voted to leave the European Union on June 24, 2016 in New York City.
Spencer Platt | Getty Images News | Getty Images
The S&P 500’s performance so far this year has an “uncanny” resemblance to the index’s showing in 1998, and if history is any guide, the rest of the year could be a roller coaster for stocks.
The S&P 500 has soared in 2019, with the index up nearly 20% since the start of the year. It hit an all-time intraday high at 3,017.80, and record close of 3,014.30 on Monday, marking the ninth all-time intraday high and and 11th record close of the year. The benchmark slipped slightly Wednesday.
Bespoke Investment Group screened the nine times in the index’s history that the S&P 500 was up more than 20% at this point in the year and the firm found a striking resemblance to the last time this was the case, in 1998.
In 1998, the S&P 500 peaked in late July around 1,184 but by the start of September, the index gave up all of its year-to-date gains because of the Russian debt crisis and the blow-up of hedge fund Long Term Capital Management, Bespoke said.
In the subsequent month after reaching its high in July, the S&P 500 lost nearly 8%, in the subsequent three months the index lost more than 15%.
The S&P 500 continued to sell off and hit a low in October of around 959.
However, once the debt crisis was over, the S&P 500 surged more than 25% from mid-October until the end of the year. The index ended the year up more than 4% since its earlier high in July around 1,229 and up more than 26% for the year.
Near-term threats that could send stocks tanking, like they did in July 1998, include a further breakdown in the U.S.-China trade war and a more severe economic slowdown.