Why the S&P 500 may be in for a 1966-style bear market, according to DWS Group

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While the Fed also was fighting inflation back in the ’60s, the S&P 500 only fell 22% in the 1966 bear market, “just slightly worse” than the 20.3% drop in the benchmark since its Jan. 3 peak this year.

The S&P 500 has found good support recently and, while in a bear market, the large-cap index may not fall much further this year, said David Bianco, chief investment officer of the Americas for fund manager DWS Group.

The S&P 500 closed 2% lower on Tuesday at 3,821.55, in part as investors grow increasingly concerned over a potential recession sparked by intense inflation and tighter monetary policy. “We don’t think it’s within reach for this year, and it may be a difficult reach even for the end of 2023,” said Bianco.

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