The U.S. stock market was heading into year-end with a head of steam, pushing the S&P 500 index ever closer to record territory. In a look back at 2023, data provider FactSet took a look at the biggest daily market moves in both directions.
- Feb. 21: -2%
- March 9: -1.85%
- March 22 -1.65%
- April 25: -1.58%
- Sept. 21: -1.64%
It’s an interesting rundown, with the biggest moves attributed to the performance of megacap tech stocks, a spring bout of banking turbulence and, of course, the Federal Reserve’s inflation battle, noted FactSet’s Torstein Jakobsen, in a blog post.
The 10 top performing days for the S&P 500
SPX
contributed to an aggregate increase of 18.35% for the index, while the bottom 10 days accounted for a collective decrease of 16.2%.
The S&P 500 was up 24.4% for the year to date through Tuesday’s close, ending less than 0.5% away from its Jan. 3, 2022, record finish. The Dow Jones Industrial Average
DJIA
has gained 13.3% in 2024, while the tech-heavy Nasdaq Composite
COMP
has soared 44%.
Through Dec. 22, the S&P 500 saw 132 positive days and 113 negative. Meanwhile, the market was more calm in 2023, with just 63 trading days posting a price swing of more than 1% through Dec. 20, not far off the 10-year average of 59. Last year, with the S&P 500 sliding more than 19%, the index saw 122 trading days with moves up or down of more than 1%.
Interestingly, the two biggest moves came early and within about six weeks of each other. The S&P 500 soared 2.28% on Jan. 6, after December jobs data offered signs that the Federal Reserve’s rate hikes were effectively cooling the economy without triggering a recession, Jakobsen said.
That didn’t mean interest rate-hike worries were vanquished. The S&P 500 fell 2% on Feb. 21, marking its worst performance of the year, largely due to apprehensions about further interest-rate increases, Jakobsen wrote.
Fed policy and inflation concerns remained central to market sentiment throughout the year, influencing six out of the 12 most volatile days, FactSet found.
Year-over-year inflation, as measured by the consumer price index, fell from a 9.1% peak last year to 6.4% by January 2023, and down to 3.2% by October. That allowed the Fed to slow the pace of rate hikes, delivering four, quarter-point increaes in 2023 and pausing after July.
The strategy “indicates the Fed’s measured approach in moderating policy to stabilize the economy while mitigating market disruption,” Jakobsen said.
The second worst performing day of the year came on March 9 when the S&P 500 endured a significant sell-off, declining by 1.85%. This downturn was largely attributed to growing concerns over the value of U.S. banks’ bond portfolios, exacerbated by SVB Financial Group’s announcement of a $1.75 billion common equity and $500 million convertible preferred offering.
SVB soon collapsed, sparking what some termed a “mini” banking crisis, exacerbated by the collapse of Swiss banking giant Credit Suisse, sparked fears of an immediate credit crunch that could send the economy into recession. Fears that were soon seen as overblown.
Of course, no discussion of 2023 is complete without a look at the extremely lopsided performance of the market, characterized by the so-called Magnificent 7 megacap tech stocks — Apple Inc.
AAPL,
, Microsoft Corp.
MSFT,
Amazon.com Inc.
AMZN,
Nvidia Corp.
NVDA,
Alphabet Inc.
GOOG,
GOOGL,
Tesla Inc.
TSLA,
and Meta Platforms Inc.
META,
See: The Magnificent 7 dominated 2023. Will the rest of the stock market soar in 2024?
Despite a broadening of the rally at year-end, the biggest names have accounted for a remarkable chunk of the rally, leaving much of the market behind.
The S&P 500 saw its third-largest move of the year on April 27, climbing 1.96% after a round of robust earnings from big tech companies. Meta led the rally, surging 14% following its earnings that exceeded expectations, further helped by its strategic investments in artificial intelligence, Jakobsen noted.
In the chart below, FactSet takes a look at a slightly broader top 10 contributors, which includes both classes of Alphabet stock, Broadcom Inc.
AVGO,
and Eli Lilly & Co.
LLY,
showing their weight in the performance is extraordinarily high:
FactSet
The top 10 accounted for 75% of the S&P 500’s weighted average return, well above the 39% average from 2014 to 2022, Jakobsen noted.
Nvidia with a rise of 229%, has been the standout, contributing 2.77% to the S&P 500’s overall return, he wrote, with the company’s success attributed largely to its data centers business, which benefited from demand for advanced artificial-intelligence infrastructure.
Also see: ‘Magnificent Seven’ up for another bull run? What to expect from technology stocks in 2024.
