Wall Street crossed a closely watched technical threshold on Thursday morning.
The S&P 500, the Nasdaq 100 and the Dow Jones Industrial Average all broke below their respective 200-day moving averages — a rare simultaneous breakdown that has only occurred a handful of times in the past decade.
The last time all three indices collapsed below the 200-day moving average together was in early 2025, when fears of sweeping tariff announcements triggered a broad market selloff.
As of 10:00 a.m. ET on Thursday, the S&P 500 traded at 6,589 — below its 200-day moving average of 6,618.97 — while the Nasdaq 100 stood at 24,260.91 versus a 200-day moving average of 24,347.52, and the Dow Jones Industrial Average fell to 45,980 against its 200-day moving average of 46,547.36.
A decade of data tells a surprisingly bullish story — with one important caveat.
Chart: All Three Major US Indices Broke Below 200-Day Average Lines
Why the 200-Day Moving Average Matters
A 200-day moving average is the average closing price of an index over the prior 200 trading sessions — roughly one full calendar year of trading.
When price falls beneath it, analysts treat the crossing as a signal that the prevailing trend has shifted from bullish to bearish.
But the signal is not binary.
What happens next depends heavily on the historical window examined — and the last decade tells a story that cuts against the bearish instinct.
Dow Jones Industrial Average — 20 Breakdown Events in 10 Years
Over the last 10 years, the SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) showed 20 instances in which it broke below its 200-day moving average.
The aggregate results, while bumpy in the short run, tilt decidedly positive over time.
| Period | Avg Return | Median Ret | Win Rate |
|---|---|---|---|
| 1 Month | +0.60% | +3.50% | 63.16% |
| 3 Months | +3.23% | +4.81% | 73.68% |
| 6 Months | +5.81% | +7.25% | 73.68% |
| 1 Year | +11.20% | +9.54% | 82.35% |
- 1 Month after breakdown: Average return +0.60% | Median +3.5% | Win rate 63.16% | Best: +7.82% | Worst: -21.66%
- 3 Months after breakdown: Average return +3.23% | Median +4.81% | Win rate 73.68% | Best: +11.7% | Worst: -10.37%
- 6 Months after breakdown: Average return +5.81% | Median +7.25% | Win rate 73.68% | Best: +19.38% | Worst: -17.16%
- 1 Year after breakdown: Average return +11.2% | Median +9.54% | Win rate 82.35% | Best: +36.94% | Worst: -6.07% | Avg max drawdown: -15.31%
The one-month window is the most volatile — a 63% win rate with a best/worst spread ranging from +7.82% to -21.66% underscores that the initial period following a breakdown can cut either way.
By the six-month and one-year marks, however, the data solidifies into a clear bullish pattern, with win rates exceeding 73% and 82%, respectively.
DIA — Last Five 200-Day Moving Average Breakdown Events
| Breakdown Date | 1 Month | 3 Months | 6 Months | 1 Year | Max Drawdown |
|---|---|---|---|---|---|
| May 25, 2023 | +3.50% | +4.81% | +7.95% | +18.57% | -8.99% |
| Sep 26, 2023 | -1.69% | +11.70% | +18.31% | +25.47% | -6.10% |
| Mar 11, 2025 | -2.09% | +3.59% | +9.93% | +12.72% | -11.59% |
| May 13, 2025 | +2.13% | +6.62% | +13.74% | — | -8.34% |
| Jun 13, 2025 | +4.62% | +8.81% | +14.80% | — | -8.34% |
Of the five latest episodes shown above, four produced positive 3-month and 6-month returns.
The sole exception — September 2023 — still recovered strongly at the 3-month and 1-year marks despite a negative first month.
Nasdaq 100 — 14 Breakdown Events in 10 Years
The Invesco QQQ Trust (NASDAQ:QQQ), which tracks the Nasdaq 100, has seen 14 such breakdown events over the past decade.
The near-term picture is more cautious than DIA — the average 1-month return is slightly negative at -0.27% — but the subsequent recovery pattern is historically powerful.
| Period | Avg Return | Median Ret | Win Rate | Avg MDD |
|---|---|---|---|---|
| 1 Month | -0.27% | +1.46% | 69.23% | — |
| 3 Months | +4.51% | +6.51% | 69.23% | — |
| 6 Months | +12.56% | +10.79% | 84.62% | — |
| 1 Year | +25.29% | +26.19% | 84.62% | -16.24% |
- 1 Month after breakdown: Average return -0.27% | Median +1.46% | Win rate 69.23% | Best: +9.45% | Worst: -14.67%
- 3 Months after breakdown: Average return +4.51% | Median +6.51% | Win rate 69.23% | Best: +24.79% | Worst: -23.65%
- 6 Months after breakdown: Average return +12.56% | Median +10.79% | Win rate 84.62% | Best: +46.50% | Worst: -25.94%
- 1 Year after breakdown: Average return +25.29% | Median +26.19% | Win rate 84.62% | Best: +61.06% | Worst: -20.12% | Avg max drawdown: -16.24%
The negative average 1-month return is dragged down by two severe outlier episodes in 2022 — the most brutal rate-hike-driven bear market in decades — during which QQQ lost as much as 14.67% in a single month following a 200-day breakdown.
Strip those out and the near-term picture is considerably more benign.
By the 6-month and 1-year marks, the data is unambiguous: 84.62% of breakdown events resolved higher within a year, with an average gain of 25.29%.
The median return of 26.19% confirms the result is not skewed by outliers.
QQQ — Last Five 200-Day Moving Average Breakdown Events
| Breakdown Date | 1 Month | 3 Months | 6 Months | 1 Year | Max Drawdown |
|---|---|---|---|---|---|
| Jan 20, 2022 | -5.59% | -7.62% | -16.51% | -20.12% | -29.93% |
| Mar 30, 2022 | -14.67% | -23.65% | -25.94% | -12.57% | -29.57% |
| Jan 30, 2023 | +0.32% | +11.00% | +31.87% | +43.65% | -10.91% |
| Mar 10, 2023 | +9.45% | +22.86% | +30.64% | +53.75% | -10.91% |
| Mar 06, 2025 | -13.42% | +7.49% | +18.00% | +24.49% | -15.69% |
The 2022 episodes stand as cautionary bookmarks: two consecutive breakdowns that both produced sustained losses across all time horizons, driven by the Federal Reserve’s most aggressive tightening cycle since the 1980s.
However, breakdowns in 2023 produced some of the strongest recoveries on record — the March 2023 episode generated a +53.75% return over the following year.
The March 2025 episode — also triggered by tariff-related macro anxiety — saw a painful -13.42% first month before recovering +18.00% at six months.
S&P 500 — 16 Breakdown Events in 10 Years
The broadest measure of large-cap U.S. equities, the SPDR S&P 500 ETF Trust (NYSE:SPY), has produced the most consistently positive historical profile following 200-day moving average breakdowns, with positive average and median returns across all four measured time horizons.
| Period | Avg Return | Median Ret | Win Rate | Avg MDD |
|---|---|---|---|---|
| 1 Month | +0.45% | +2.05% | 60.00% | — |
| 3 Months | +3.52% | +5.79% | 73.33% | — |
| 6 Months | +9.81% | +13.15% | 86.67% | — |
| 1 Year | +15.95% | +13.81% | 80.00% | -16.52% |
- 1 Month after breakdown: Average return +0.45% | Median +2.05% | Win rate 60.00% | Best: +8.48% | Worst: -14.82%
- 3 Months after breakdown: Average return +3.52% | Median +5.79% | Win rate 73.33% | Best: +15.12% | Worst: -14.81%
- 6 Months after breakdown: Average return +9.81% | Median +13.15% | Win rate 86.67% | Best: +22.04% | Worst: -15.68%
- 1 Year after breakdown: Average return +15.95% | Median +13.81% | Win rate 80.00% | Best: +41.15% | Worst: -10.83% | Avg max drawdown: -16.52%
Of the three indices analyzed, SPY’s 6-month win rate of 86.67% is the highest, and the 1-year median return of +13.81% suggests that the S&P 500 has historically used 200-day breakdowns as launching pads for meaningful recoveries rather than the beginning of prolonged bear markets — at least in most cases.
SPY — Last Five 200-Day Moving Average Breakdown Events
| Breakdown Date | 1 Month | 3 Months | 6 Months | 1 Year | Max Drawdown |
|---|---|---|---|---|---|
| Dec 05, 2022 | -5.06% | -0.17% | +6.75% | +13.81% | -10.29% |
| Jan 18, 2023 | +4.29% | +5.79% | +15.50% | +23.23% | -10.29% |
| Mar 09, 2023 | +4.61% | +9.59% | +13.78% | +30.58% | -10.29% |
| Oct 20, 2023 | +7.85% | +15.12% | +20.05% | +38.49% | -8.41% |
| Mar 10, 2025 | -11.43% | +6.97% | +16.01% | +20.65% | -13.72% |
Four of the five completed recent episodes delivered positive 6-month and 1-year returns. The most relevant analog to today may be March 10, 2025 — the last time all three indices simultaneously broke below the 200-day moving average amid macro-driven panic.
That breakdown showed SPY lost 11.43% in its first month, then recovered 16.01% over the following six months and 20.65% over the full year.
The Caveat That Cannot Be Ignored
The 10-year data is unambiguously bullish on a 12-month horizon. But the average maximum drawdown across all three indices — negative 16.52% for SPY, negative 16.24% for QQQ, negative 15.31% for DIA — shows that the recovery is rarely linear.
Investors who entered immediately after the March 2025 breakdown absorbed another 11.43% loss in SPY and another 13.42% in QQQ before the recovery took hold.
The 10-year win rates are compelling.
Reaching them requires sitting through the drawdown first.
Photo: Shutterstock
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