Nasdaq Soars 47% in 1 Year as S&P 500 Gains 33% Despite Recession Fears

6 articles · Updated · The Motley Fool · May 15

The Nasdaq Composite returned about 47% over the past year, outpacing the S&P 500’s roughly 33% gain and the Dow’s 23% rise even as investors faced inflation, recession warnings and Iran war supply disruptions.
That performance underscored how hard short-term market timing has been: sharp selloffs were followed by fast recoveries that punished investors who exited during downturns.
Vanguard’s S&P 500 ETF illustrates the risk — it fell from about $539 on Jan. 1, 2025 to $457 in mid-April, then rebounded to roughly $542 by June, turning a panic sale into both a realized loss and a costlier reentry.
Capital Group data show the odds improve with patience: about 33% of one-year S&P 500 holding periods were negative, versus 7% over five years and none over 10 years in the past 82 years.
The broader takeaway is that long-term returns depend less on predicting the next swing than on staying invested in fundamentally strong companies through volatility.

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