Investors and astronomy fans alike are in high spirits to start the week ahead of a total solar eclipse set for this afternoon. How do solar eclipses affect the stock market?
Well, the potentially once-in-a-lifetime events don’t in fact have a particularly well-established history in the stock market. In layman’s terms, don’t expect the moon’s brief overtaking of the sun today to result in any notable stock movement. As it stands, however, stocks are up across all major indices right now, with the Nasdaq Composite eyeing a 0.3% gain so far.
That said, stocks do tend to perform quite well in total solar eclipse years. Indeed, in 10 of the past 13 solar eclipse years from 1900 to 2017, the Dow Jones Industrial Average went on to close the year in the green — sometimes by notable margins.
Most famously, stocks soared 44% for the Dow in 1954, with three other eclipse years recording gains of 25% or more, per Detroit Free Press.
Worth noting, of the three solar eclipse years in which stocks didn’t climb — 1923, 1920 and 1932 — the market actually floundered pretty badly. In 1930 and 1932, the Great Depression led the Dow to drop almost 34% and 23%, respectively. In 1923, however, stocks only ticked down 3.3%.
How Do Solar Eclipses Affect the Stock Market?
Now, to be clear, correlation is not (and has never been) causation. 10 out of 13 is hardly enough data to draw any hard conclusions, especially given that stocks tend to climb more often than not in their long history. As such, this is hardly evidence that the solar eclipse is in any way affecting mass psychology enough to move stocks. Rather, it’s simply a happy coincidence.
If that isn’t reason enough to put down the ticker sheets and grab your ISO 12312-2 international standard solar eclipse eyewear later today, I don’t know what is.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
