Stocks Tend to Zigzag Around Olympics, Says Ned Davis

How have stocks performed amid the Olympic Games? Historically, for the Summer Olympics, it has been a zigzag; that pattern may continue this year.

Stocks tend to drop leading up to the games, stabilize during them and rally once they are over, according to a study by Ned Davis Research that looked at Summer Olympics held every four years back to 1988. The host country’s stocks, though, usually slide just before the Olympics, then take off during and after.

In 2024, for France’s CAC 40, the performance indeed was down 6.7% for the three months before the games began in Paris, Davis stated. In July, the French index was flat. But since the Olympics commenced on July 24 through Thursday, it rose 1.4%.

This year, as of July when the Olympics started, stocks’ performance on a broad scale also has been muted: For the S&P 500, July and August generally are up. This July, the S&P 500 index rose just 1.1% and the MSCI All-Country World Index 1.75%. Since the games kicked off, the S&P and MSCI indexes are down.

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Of course, no one can say why stocks follow this path in relation to the Olympics. Ned Davis indicated that the market was oversold leading up to the games.

For the last Summer Olympics, in Tokyo in 2021, the ACWI slipped 0.4% three months before, rose 1.4% while the games were in progress, then jumped 6.1% in the three months afterward.

What about bonds? Since 1988, Davis wrote that “the host country’s long-term bond yield has been up slightly heading into the games and has declined afterward, with the yield’s level six months after the games usually lower than its level six months before them.”

For the Japan Olympics, its government bond yield was down a mere 0.03% six months before and up 0.16% for the six months after. How France will fare remains to be seen, long after the last medal is awarded.