It’s been a minute since I’ve written about the stock market, and what better time to check in than after the wild week that was.
This is not a political newsletter, but leading into the midterm elections last Tuesday, there was a lot of uncertainty about what it would mean for the stock market if one party or the other prevailed. And with the Democrats ending up with control of the House and Senate, I received more than one text message with serious concern about a major market selloff.
So naturally, on Wednesday the U.S. stock market soared. The S&P 500 rose about 1.6%, which was the second-biggest day-after midterm gain since 1982.
Why? Well, one explanation could be that markets hate uncertainty more than they care about any particular political outcome.
But then Thursday showed up, and the S&P 500 fell a whopping 4%. The worst single-day decline in the U.S. market since the April 2025 tariff shock.
Leading the downward swing were a lot of the popular semiconductor, AI, and tech stocks. Last week alone, Nvidia was down 10%. SanDisk was down nearly 30%. Tesla was down 11%. Micron was down 22%.
And then on Friday, we saw an initial swing back upward in the morning, followed by a slow trickle down to end around 0.5% positive for the day.
What does all of this market movement mean?
Are we heading for a downturn? Are stocks going to rally back?
I don’t know.
What I do know is that it can be quite exhausting following the market day to day.
If you take a tiny step back, you’ll find that the U.S. stock market, despite all of the recent volatility, is still up over 7.5% this year. The past 12-month return is nearly 10%.
If you want to take an even bigger step back, you’ll find that crazy market weeks like the one we just experienced are small blips compared to the big picture trajectory of the stock market.
The following chart from Dimensional shows the growth of a dollar invested in a global index from 1970 through 2025:
As you can see, regardless of the myriad of “world-ending events” that seem to pop up all the time, you would have 142x your money over that timeframe.
Every one of those dots feels huge while they’re happening. But zooming out and looking at them in hindsight, you have to squint to make them out. Up close, they’re terrifying. From a distance, they’re just speed bumps on a road that keeps heading uphill.
The good news is, you don’t have to get worked up about the day-to-day movements of the market. If you want, you can choose to sit back and let the long-term growth of the market compound in your favor.
Thanks for reading!
Jake Elm, CFP® is a financial advisor at Dentist Advisors. Jake a graduate of Utah Valley University’s nationally ranked Personal Financial Planning program. As a financial advisor at Dentist Advisors, he provides dentists with fiduciary guidance related to investments, debt, savings, taxes, and insurance. Learn more about Jake.