Published October 16, 2026
It turns out the answer is sometimes yes, sometimes no.
In 1973-1974 double-digit inflation was raging, the OPEC oil embargo was crippling America and the S&P500 fell a whopping -48%. And gold? The shiny precious metal went to stratosphere rising a phenomenal +130% over that same time period. This single event cemented gold’s allure as a safe haven among investors, one that persists to this day.
But what about other stock market crashes since then? In no subsequent crashes did goal rally like it did in the early 1970s. Here are all the subsequent major stock market corrections/crashes over the last 50 years and the returns for gold during those periods:
| 1980–1982 Early ’80s Recession: | S&P500 Decline: -27% | Gold Return: -22% |
| 1987 Black Monday Crash: | S&P500 Decline: -34% | Gold Return: +6% |
| 2000–2002 Dot-Com Bust: | S&P500 Decline: -49% | Gold Return: +12% |
| 2007–2009 Global Financial Crisis: | S&P500 Decline: -57% | Gold Return: +25% |
| 2020 COVID Panic: S&P500 Decline: | S&P500 Decline: -34% | Gold Return: +11% |
| 2022 Inflationary Bear Market: | S&P500 Decline: -25% | Gold Return: -7.4% |
So what can we learn from this data? In the 6 major declines in the S&P500 starting in 1980, where the average decline was -37.7% gold did quite well, returning an average of 4.1%. However the returns for gold were all over the place ranging from -22% to +25%. To understand the reason for the differences requires looking at each instance and the economic circumstances. What jumps out is that in the early 1980s and in 2022, inflation was a serious threat to the economy and in both instances there were aggressive, rapid interest rate hikes by the Federal Reserve to combat high inflation. Because gold pays no yield, its opportunity cost rises dramatically when central banks rapidly push up real interest rates, suppressing its typical safe-haven surge even while stocks are crashing.
Market Update
The US stock market faced a challenging week as initial earnings caution gave way to a sharp sell-off fueled by rising inflation risk and AI credit risk. Stubbornly hot macroeconomic data forced investors to recalibrate their expectations for Federal Reserve interest rate hikes, overshadowing the official kickoff of the third-quarter corporate earnings season. Meanwhile, neocloud stocks cratered over cash flow and credit risk concerns.
On Monday, stocks declined slightly to begin the week in muted trading as investors awaited major corporate earnings and inflation data. On the heels of a -7% decline in the South Korean stock market, US-listed memory chip stocks fell -4.3% dragging down the technology sector due to rising concerns over Chinese competition. Meanwhile, energy markets surged following drone and missile strikes on Riyadh’s international airport, pushing Brent crude futures near $107 a barrel. Despite opening lower, the S&P500 finished basically flat while the NASDAQ100 fell -0.71% and the Russell 2000 fell -0.45%.
Tuesday again saw a flattish trading day for the S&P500 along with marginal declines of -0.31% and -0.40% for the NASDAQ 100 and Russell 2000, respectively. Investors shrugged at mixed third-quarter results from Wall Street’s largest banking institutions except for Wells Fargo
Which fell >3% after missing its revenue forecast, and Citigroup tumbled 5.6% due to softer sequential trading metrics. Conversely, UnitedHealth Group jumped over 4% after an earnings beat. AI trade skepticism also intensified following warnings from tech leaders regarding excessive sector spending. The S&P 500 closed essentially flat at -0.02%, the NASDAQ 100 fell -0.31% and the Russell 2000 was again the weakest at a -0.40% loss.
On Wednesday, markets suffered a broad-based, steep retreat after September’s Consumer Price Index (CPI) unexpectedly accelerated to 3.7% year-over-year. The hot reading stoked widespread fears of “higher-for-longer” inflation and prompted interest-rate traders to sharply up the probability of a Federal Reserve rate hike. The AI trade also unwound a bit as investors’ anxiety about highly-leveraged neocloud companies pummeled the share prices of CoreWeave (-15.46%), Iren (-12.18%), CIFR (-12.35%) Applied Digital (-9.43%) and Nebius (-10.08%). On the day indexes fell hard with the S&P500 down -1.11%, the NASDAQ 100 at -1.86% and the Russell 2000 at -1.93%.
Thursday, investors bought the dip. While the S&P500 only rose +0.33%, the NASDAQ 100 and Russell 2000 both vaulted higher by about +1.4% as AI companies went out of their way to sooth investor anxiety with statement the strength of demand for their services.
Friday, the wheels came off with broad-based selling throughout the day. As happened Wednesday, the neocloud stock led the way down, most falling more than -11%. Energy stocks (XLE) were up 2.5% as tight supply fears pushed the price of oil to almost $102. Traditional defensive sectors utilities (XLU) +1.3%, consumer staples (XLP) +1.1% and materials (XLB) +0.7% also bucked the trend. Technology shares led the way down -3% with semiconductors falling -3.4%. Notably, semiconductor stocks have now fallen 9 consecutive days which has not happened since May 2006!
For the week the NASDAQ tumbled -5.5%, the Russell 2000 sank -3%, and the S&P500 outperformed on a relative basis falling less than 2%.
Warm wishes and until next week.