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History shows investors are right to worry about 2026 being a bad year for U.S. stocks

Christine Idzelis
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⚡ Quantum Brief
Investors face heightened risks in 2026 as DataTrek Research identifies three historical triggers for severe U.S. stock market declines since 1928 converging simultaneously this year. The Iran conflict exacerbates market volatility, aligning with past geopolitical crises that preceded major downturns, per the firm’s analysis of 98 years of stock performance data. DataTrek’s model flags recessionary pressures, valuation extremes, and external shocks—all present in 2026—as the trio of conditions tied to the worst annual returns in market history. Historical patterns show such convergence precedes average declines of 20% or more, with 2026 mirroring 1974 and 2008 in risk profile, though timing and magnitude remain uncertain. Analysts warn the current environment justifies investor caution, as prior instances of these combined factors resulted in prolonged recoveries rather than quick rebounds.
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Site SearchClearSEARCHAdvanced Search ➔Search ResultsSymbolsNo results foundAll NewsArticlesVideoPodcasts0 ResultsNo Results FoundAuthorsNo results foundSectionsNo results foundColumnsNo results found The Tell3 signals tied to severe market drops are all flashing nowHistory shows investors are right to worry about 2026 being a bad year for U.S. stocksLast Updated: March 24, 2026 at 5:59 p.m. ETFirst Published: March 24, 2026 at 12:53 p.m. ETShareResizeListen(4 min)Market conditions are triggering red flags that stock-market investors should heed. Photo: AFP via Getty ImagesThree factors that have preceded double-digit stock-market declines are all present in 2026. “Bad years for the S&P 500 are due to very specific factors, not just bad luck or arbitrary changes in investor sentiment,” said Nicholas Colas, co-founder of DataTrek, in commentary shared with MarketWatch on Tuesday. About the Author Christine IdzelisChristine Idzelis is a markets reporter at MarketWatch and is based in New York.Show Conversation (0)Back To TopA Dow Jones CompanyCopyright © 2026 MarketWatch, Inc. All rights reserved.Terms of UsePrivacy NoticeCookie NoticeArchive MarketwatchCustomer CenterContact UsNewslettersNewsroom RosterVirtual Stock ExchangeMarketWatch GuidesCopyright PolicyManage NotificationsCancel My SubscriptionCompanyDow JonesCode of ConductCorrectionsReprints & LicensingDigital Self ServiceYour Ad ChoicesCorporate SubscriptionsAccessibilityDow Jones NetworkThe Wall Street JournalBarron'sInvestor's Business DailyFinancial News Londonrealtor.comMansion GlobalDow Jones Smart MoneyIntraday Data provided by FACTSET and subject to terms of use. Historical and current end-of-day data provided by FACTSET. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.

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