S&P 500 History Suggests 10% Drop After Downgrade — Followed By 35% Rally
It's downgrade déjà vu. Late Friday, after Wall Street had already packed up for the weekend, Moody's quietly dropped the hammer: the U.S. just got its credit rating cut from Aaa to Aa1.If this feels familiar, that's because it is – and the market's playbook has been pretty consistent. The real question now: Will the market freak out for the third time, or has it finally learned to chill?Another 10% Correction Coming?Let's rewind.In August 2011, Standard & Poor's made history by downgrading U.S. debt for the first time ever. The result? A 10.37% drop in the S&P 500 Index over the next 41 trading days, according to data analyzed by Piranha Profits. But fast forward 12 months, and the index was up 36%. Investors who bought the dip didn't just survive – they thrived.Then came August 2023, when Fitch pulled the same move. Same script, different year. The S&P 500 slid 10.31% over 58 ...Full story available on Benzinga.com
