Do you remember the best day in the U.S. stock market in the last 16 years?
I didn’t, even though it occurred just a few months ago. I had forgotten that the U.S. stock market rose nearly 10 percent on April 9 — a magnificent gain that I discounted, at the time, because it happened in the middle of the wild stock swings caused by the on-again-off-again Trump tariff announcements.
April 9, as it turns out, ranked third among all of the best one-day returns in the U.S. market over the last 50 years. The market rallied after President Trump abruptly announced he would back down on many of his tariffs for 90 days — but it fell again sharply the next day, when it became clear that many tariffs, especially those on China, would still be extremely high.
Even thinking about that episode makes my head spin. What’s worth remembering as an investor is that the April 9 rally, and every one of the top 10 days of the last five decades, occurred soon after — and, often, right in the middle of — a terrible stock market decline. The market’s best days don’t define market trends so much as they represent brief eruptions of exuberance.
Trying to forecast when the markets will rise and fall is a fool’s errand.
“Don’t kid yourself that you’re smart enough to do better than just buying and holding the market,” said Burton Malkiel, the Princeton economist who in 1973 wrote the investing classic, “A Random Walk Down Wall Street.”
“When you try to beat the market, you will undoubtedly do worse,” he said in a phone interview. Mr. Malkiel is now the chief investment officer at Wealthfront, an automated investing firm, and he provided data on the best-performing days in the market over the last 50 years, along with another data maven, Alex Michalka, who leads Wealthfront’s research.
Mr. Malkiel pointed out that it would have been easy to miss the best days in the stock market precisely because they were all associated with the worst market declines.
Take this year’s. In the bewildering stock market of 2025, that one-day surge in April can be viewed as a rebound from the chaos induced by the Trump administration’s tariffs. While there have been twists and turns, that stock rebound is still underway. But will it last? It’s impossible to know.
The market has been sizzling lately, with a renewed frenzy for so-called “meme stocks” — securities whose rise has little to do with intrinsic value and much to do with social media influencers. Now, the hot stocks are called “DORKs” — an acronym for Krispy Kreme (whose stock ticker is DNUT), Opendoor, Rocket Companies and Kohl’s. Before getting too excited, remember that the last meme stock boom in 2021 ended in a crash.
This year’s fabulous April 9 rally came after a horrendous decline — a drop of about 19 percent that included a two-day loss of more than 10 percent in the S&P 500 on April 3 and April 4.
The Other Best Days
It is noteworthy that of the 10 best days in the last 50 years, as calculated by Wealthfront, using data provided by the Dartmouth economist Kenneth R. French, five occurred during the great financial crisis of 2008 and 2009. Three of those five occurred while the stock market was mired in a recession. If you had bought stocks right after those surges you would have had to bear heavy losses.
In fact, the two most glorious days for stock investors in the last 50 years are rarely mentioned — I confess that I’d forgotten them, too — because they occurred in the depths of the 2008 downturn.
The single best day in half a century was on Oct. 13, 2008, when the U.S. stock market gained 11.4 percent, according to Wealthfront. The market went nowhere for a while, and then, on Oct. 28, it rose 9.8 percent, in the second-best return in 50 years.
Yet neither day was cause for protracted celebration because the stock market had already dropped more than 40 percent when those surges happened — and soon after it plunged further. Investors endured misery for months. The market didn’t begin a sustained upward trajectory until March 10, 2009.
A cluster of excellent stock market days popped up during the Covid-19 pandemic, in March and April 2020. One occurred before the market bottom. Then, two days with great returns came after the Federal Reserve Board said on March 23, 2020, that it would use “its full range of tools to support households, businesses and the U.S. economy” — basically, whatever it takes — and the market began a long rising trend.
The sole remaining top-10 day was Oct. 21, 1987 — just two days after the crash known as Black Monday, when the S&P 500 lost 20.5 percent in a single session. Why the market fell so far that day and why it began rising so soon after are still being debated all these years later. The Fed’s intervention helped spur that market rally, of course, and that has often been the case after other major declines.
The Fed aside, I don’t see any pattern that can be useful for short-term investing now, not in the 1987 crash or the other dates either.
More Noise Than Signal
These dates are great for trivia quizzes. Otherwise, though, all taken together, there is little here to make a general rule about market timing.
To the contrary, this is strong evidence for long-term investing. Seeing a pattern when none exists, and trying to beat the market, is a dangerous game. Try not to get emotional about investing, Professor Malkiel said, especially after the market has begun rising. “Whenever you do this, you’re much more likely to be wrong than right,” he said. “You’re much more likely, when your emotions get hold of you — both on the upside and the downside — to do the wrong thing.”
Making sense of the stock market this year isn’t a straightforward task. After all, the Trump administration’s endless tariff announcements — including his so-called “Liberation Day” tariffs on April 2 — set off many of the stock market’s problems, while periodic softening in the tariff terms have bolstered the market.
But the tariff problem hasn’t gone away. This past week, there has been a stream of tariff news, but, fundamentally, the average effective tariff rate in the United States is somewhere above 17 percent, more than six times higher than it was at the start of the year, and at its highest level since the 1930s.
The difference, at the moment, from the negative reaction earlier in the year is that the financial markets appear to have become inured to news that would have been abominable not long ago. Higher inflation and slower economic growth are still likely to be a consequence of higher tariffs, most economists say. The market mood could easily shift.
Other issues, like the threat of a loss of independence for the Fed in the face of incessant badgering by the Trump administration, have only worsened. The federal budget deficit is swelling. And growth in the labor force appears to be slowing, a consequence of accelerated deportations and slowing immigration.
None of that tells us much about the market’s future. Over the long run, the stock market tends to rise because it is based ultimately on the profits of corporations, and despite setbacks, the economy is likely to grow. Short term, however, the stock market tends to resemble “a random walk,” Professor Malkiel said — a series of arbitrary moves that can’t be predicted. He conceded that momentum and other factors do affect short-term market movements, but for the most part, he said, “you are better off just holding an index fund.”
Certainly, the rise and fall of the market is not, in itself, a useful guide to where the market is heading. It makes better sense to ignore all of the noise and hold on for years, with broad diversified holdings.
For those readers whose life spans, or life situations, don’t allow the great luxury of ignoring the vicissitudes of the stock market, I would say, sadly, that the stock market may not be the place for you. Safer holdings, in certificates of deposit, Treasury bills and bonds, may need to dominate your investments. And for nearly everyone, it’s important to have put away enough money so that you can pay the bills when the stock market declines, as it does for extended periods.
For those with long horizons, however, it’s probably wise, when things look bleak in the stock market, to assume that this, too, shall pass. Unfortunately, that same message holds true for the markets’ best days. They, too, are ephemeral.
Profit-making by public companies will continue, though we don’t know which ones will prosper. So I’m hedging my bets with stock investments that are spread all over the planet.