The S&P 500 Failed to Beat Inflation Only 4 Times in 20 Years. Here's the Pattern.
The S&P 500 has gained 13.5% in 2026, outpacing US consumer prices, which rose 3.4% over the 12 months through July.
The trend also holds over the longer term. Historical data show that the index has outpaced US inflation in 16 of the past 20 calendar years.
How the S&P 500 Has Performed Against Inflation
The S&P 500 delivered a 14.76% real return in 2025 after accounting for 2.70% inflation, according to The Kobeissi Letter. The index also recorded strong real returns in the previous two years, gaining 21.47% in 2024 and 22.11% in 2023.
"Stocks have historically been one of the best hedges against inflation," the post read.
The record is thinner than the count suggests. The four years when stocks failed to beat inflation were 2008, 2011, 2018, and 2022.
Three of those four years ended with inflation below 3%. Consumer prices rose just 0.1% in December 2008, yet the S&P 500 plunged 37% that year.
The 2022 result was different. The BLS reported a 6.5% year-over-year increase in consumer prices in December. The S&P 500 fell 18.11%. The real loss came to roughly 23%.
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