How the S&P 500 performed by decade, from the 1930s to today
The S&P 500's performance has varied considerably by decade, with the 1950s its strongest to date and the 2000s its worst. Here's a decade-by-decade breakdown of its average annual returns, based on calculations from Shiller's dataset, along with the factors that drove those returns in each decade.
1930s
The 1930s were a volatile decade marked by the Great Depression, which began with the stock market crash of 1929 and lasted until 1939. There was a gradual recovery in the middle and toward the end of the decade as President Franklin D. Roosevelt's New Deal programs stabilized the economy. The S&P 500's average total return in the 1930s was 5.01%.
Average real total returns were even higher at 6.46%. While real returns in most decades are lower because they account for inflation, this decade experienced deflation. The U.S. money supply fell by almost 30% from the fall of 1930 to the winter of 1933.
1940s
Market performance in the 1940s started slowly due to World War 2, but the S&P 500 ended with an average total return of 10.06%. The wartime effort increased earnings for many companies, and consumer spending surged once the war ended due to the GI Bill and the expansion in suburban housing. However, inflation was high in the 1940s, resulting in average real total returns of 4.98%.
1950s
The 1950s were the best decade on record for the S&P 500, delivering average total returns of 20.49%, which fell to 17.96% after adjusting for moderate inflation. Economic growth, the baby boom, and new industries, including aviation and electronics, all converged to drive the market to new highs.
1960s
The S&P 500 fluctuated in the 1960s. Tax cuts introduced by the Kennedy administration were passed by the Johnson administration in 1964 and stimulated the economy, but the Vietnam War pushed up inflation over the back half of the decade. Average total returns for the S&P 500 were 8.74% in the 1960s; after adjusting for inflation, average real total returns were 6.18%.
1970s
The 1970s were a challenging decade for the U.S., with President Richard Nixon ending the convertibility of the U.S. dollar into gold in 1971 and the Watergate scandal leading to political instability. In addition, an oil embargo in 1973 and an energy crisis in 1979 caused major fuel shortages in the U.S.
This decade helped popularize the term "stagflation," which refers to a period with stagnant economic growth and high inflation. The S&P 500's annual returns reflect the effects of inflation. The index's average total returns in the 1970s were 7.55%, but average real total returns were just 0.44%. The stock market grew, but the decreasing value of the U.S. dollar eroded most of those gains.
1980s
The S&P 500 delivered considerable growth in the 1980s, with average total returns of 17.92% and 12.7% after adjusting for inflation. The Federal Reserve's strategy to break inflation was one of this decade's growth drivers, as it raised interest rates sharply and then lowered them once inflation dropped.
Policies enacted by the Reagan administration, chiefly tax cuts and deregulation in many industries, also helped boost the stock market. Another factor was the rise in employee 401(k) plans, which began a widespread rollout in the early 1980s.
1990s
The 1990s were largely a decade of economic prosperity for the U.S., with technological innovation, low interest rates, moderate inflation, and increased productivity. Average total returns for the S&P 500 were 18.64% in this decade, and average total real returns were 15.36%. However, excitement around the internet and technology companies also led to extremely high valuations, which would have serious consequences at the start of the new millennium.
2000s
The 2000s were a lost decade for investors in the U.S. stock market. It suffered two of its worst bear markets in history: the dot-com crash from 2000 to 2002 and the global financial crisis from 2007 to 2009.
Stock performance during recessions is bad enough, but the impact is even more pronounced when you have two within such a short time period. The S&P 500's average total return in the 2000s was 1.48%, but after adjusting for inflation, it was -1.13%, making it the only decade with a negative return. The index also had its worst year on record since 1931, with total returns of -39.20%.
2010s
The S&P 500 bounced back in the 2010s, with average total returns of 13.75% and average total real returns of 11.79%. The Federal Reserve used quantitative easing (QE) to help the U.S. recover from the financial crisis, and it held interest rates at 0.00% to 0.25% for seven years, from December 2008 to December 2015. Growth in mega-cap technology companies also drove high returns this decade.
2020s
The 2020s are still in progress, but this has been a tumultuous period in which the market has performed very well despite major setbacks, including the COVID-19 pandemic and the 2022 bear market. The S&P 500 had average total returns of 16.49% from 2020 through 2025 and average total real returns of 11.79%. The market had its fastest recovery in history after the pandemic, and while 2022 saw a longer downturn, AI stocks have since taken over, sending the market to new highs.
