[US Stocks] Will History Repeat Itself? Important Points for Long Term Investment | Okamoto Heihachiro's Path to Mastering US Stocks | Moneyクリ Monex Securities' Investment Information and Media Useful for Money

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The shock the July U.S. employment data (released on August 1, 2025) had on the market - the moment of psychological shift for the S&P 500.

August tends to be a "somewhat soft season" for the U.S. stock market.

It feels like déjà vu, just like an event from a year ago.

So, do you all remember that on August 2, 2024, the U.S. employment statistics announced fell significantly short of market expectations, causing a major reaction in the stock market? At that time, the number of non-farm payrolls was expected to be around 175,000, but the actual figure was only 114,000. Furthermore, the unemployment rate rose to 4.3%, which was the highest level since 2021. This clearly indicated that the momentum in the labor market was slowing down.

In response to these numbers, the S&P 500 fell by 1.8% on August 2, 2024 alone. Selling continued, resulting in a 4.8% adjustment in just two trading days, and the entire market was temporarily enveloped in a mood of wanting to "avoid risk." However, the trend changed quickly. On Monday, August 5, the decline stopped, and from there, stock prices began to recover strongly. The background to this was a sudden rise in expectations that the FRB (Federal Reserve Board) might move to lower interest rates in the near future.

The market digests short-term negative factors and returns to an upward trend.

In such circumstances, the S&P 500 surged from its low of 5,186.33 on August 5, 2024. Then, at the FOMC (Federal Open Market Committee) meeting held on September 17-18, 2024, a 0.50% interest rate cut was decided, bringing the policy rate down to 4.75-5.00%. Just 32 trading days after August 5, on September 19, the S&P 500 reached 5,713.64 points, setting a new all-time high.

As of July 16, 2024, the recent high of the S&P 500 (5,667.20) recorded a decline of about 8.5% down to the low during the adjustment phase in August (5,186.33). At first glance, this may seem like a sharp adjustment, but the recovery that followed was very quick, and the market successfully digested the short-term negative factors and returned to an upward trend.

The S&P 500 has experienced, on average, about three adjustments of around 5% and one adjustment exceeding 10% per year since 1928. Additionally, August tends to be a "somewhat soft season" for the U.S. stock market, so some degree of price movement can be considered within the expected range.

Important Aspects of Long-Term Investment

In 2025, the "additional tariffs" proposed by President Trump are underway, making the market outlook even more difficult to read. However, just a year ago, there were also uncertainties regarding Trump's potential return and his policy direction. Considering that, the current situation may be similar to what it was then.

The important thing is to remain calm and respond with a long-term perspective, without getting overly excited or distressed by short-term price fluctuations. The market has its ups and downs, but we must not forget that it is the investors who remained calm, as history shows, who ultimately reaped the rewards.

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