Do Major Hurricanes Impact Stocks?

Do Major Hurricanes Impact Stocks?

September 04, 2019

First and foremost, our thoughts are with all of those that were impacted by Hurricane Dorian over the Labor Day holiday and all those that are still in its path.

Many have asked us what stocks tend to do after a major hurricane hits the United States. Given we had category 4 and 5 hurricanes last year, this question unfortunately seems to come up more than anyone would like.

“Although the devastation a major hurricane causes can’t be denied, it is worth noting that equity markets have taken the storms in stride,” explained LPL Financial Senior Market Strategist Ryan Detrick. “In fact, a month after the 15 most costly hurricanes to ever hit the United States formed, the S&P 500 Index was higher nine of those times with a solid median return of 1.2%.”

As shown in the LPL Chart of the Day, Do Major Hurricanes Impact The S&P 500 Index?, the near-term stock market results after a costly hurricane have been quite healthy. It is worth noting, though, that the average returns are skewed due to the massive equity drop after Hurricane Ike during the midst of the financial crisis. Lastly, if you are in Dorian’s path, please stay safe!



Please see the Midyear Outlook 2019: FUNDAMENTAL: How to Focus on What Really Matters in the Markets for additional description and disclosure.

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The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

This Research material was prepared by LPL Financial, LLC.

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