June 22, 2023

Will Inflation Hurt Stock Returns? Not Necessarily.

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Investors may wonder whether stock returns will suffer if inflation keeps rising. But a look at equity performance in the past three decades does not show any reliable connection between periods of high (or low) inflation and US stock returns.

  • While 2022 saw high inflation and poor stock returns, there have been other periods with high inflation and strong stock market performance.
  • Twenty-two of the past 30 years saw positive stock returns even after adjusting for the impact of inflation.
  • Over the period charted, the S&P 500 posted an annualized compound return of 7.0% after adjusting for inflation.

History shows that stocks tend to outpace inflation over time—a valuable reminder for investors concerned about rising prices.


Past performance is no guarantee of future results. Short-term performance results should be considered in connection with longer-term performance results. Investing risks include loss of principal and fluctuating value. There is no guarantee an investment strategy will be successful. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio.

Real returns illustrate the effect of inflation on an investment return and are calculated using the following method: [(1 + nominal return of index over time period) / (1 + inflation rate)] − 1. S&P data © 2023 S&P Dow Jones

Indices LLC, a division of S&P Global. All rights reserved.
Inflation based on non-seasonally adjusted 12-month percentage change in Consumer Price Index for All

Urban Consumers (CPI-U). Source: US Bureau of Labor Statistics.
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