Solar activity and the S&P 500: numbers, not narratives
Over more than a century of data, the idea that the Sun’s activity might drive stock market cycles sounds intriguing but does not stand up statistically for the S&P 500. Long‑horizon studies that match sunspot records with U.S. equity returns consistently find that solar variables explain at most a fraction of one percent of the index’s volatility. At the same time, a few recent works show stronger relationships for technology‑heavy indices and for geomagnetic disturbance indices, hinting at niche effects that are far from a robust timing tool for broad‑market investors.
This article summarises those findings in plain language and with concrete magnitudes, and ends with clear risk and legal caveats.
What the long‑term data actually say
The core statistical question is simple: when solar activity is high or low, do S&P 500 returns systematically change?
To answer it, researchers typically combine:
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International sunspot numbers from SILSO (Royal Observatory of Belgium), which provide monthly and annual sunspot counts back to the 19th century.
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S&P 500 (or its predecessors) from Shiller’s historical series for 1871–1926 and modern data (FRED, SlickCharts, etc.) for 1926 to today.
The key empirical results:
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CXO Advisory, using 1871–2018 monthly and annual data, finds:
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Monthly sunspots vs. S&P Composite returns: correlation about −0.02; the implied “explanatory power” is effectively 0%.
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Annual sunspots vs. annual returns: correlation about −0.07; still only around 1% of the variance in returns can be associated with solar activity.
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When years are grouped into bins by sunspot level (solar minimum, low, high, maximum), the average annual S&P 500 total return in each bin sits close to the long‑term average of roughly 10% per year, and differences are small compared with normal year‑to‑year volatility.
In practical terms, over 150 years the U.S. market delivered high average returns through many solar cycles, and those returns did not reliably jump or collapse at solar maxima or minima.
Geomagnetic indices and “space weather” papers
A more nuanced line of research looks not at sunspots alone but at geomagnetic activity, which is more directly related to space weather that can affect human biology and technology.
One widely cited paper, “Effect of Ap‑Index of Geomagnetic Activity on S&P 500 Stock Market Return”, uses a global geomagnetic disturbance index (Ap) and U.S. stock returns.
Its main findings:
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Periods with higher geomagnetic activity tend to coincide with lower U.S. stock returns.
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The effect is statistically significant in the authors’ models and is stronger when market liquidity is high.
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The authors suggest this may be because geomagnetic storms impact human health and mood, which in turn influence investment decisions.
However, even in that work:
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The incremental contribution of the geomagnetic index to explaining return variation is modest. Most of the movement in the market still comes from economic and financial factors, not space weather.
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The study is limited to a specific sample and specification; like any empirical paper, it may be sensitive to time period and model design.
Complementing this, a 2015–2024 dissertation “Solar Influences on Financial Markets” finds:
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For the NASDAQ Composite, which is dominated by technology firms, yearly rank correlations with sunspot numbers in that decade fall around −0.65 to −0.69, and daily correlations are even stronger in absolute terms in some specifications.
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For SPY (the S&P 500 ETF), the correlations are noticeably weaker and less consistent across time scales.
In plain English: there is evidence that in a recent, tech‑heavy decade, higher sunspot activity was often associated with weaker NASDAQ performance, but the broad S&P 500 did not move in lockstep, and the sample is short. That is a long way from a robust, century‑tested rule.
Are the effects big enough to trade?
Even when some relationship can be detected in the data, investors need to ask whether it is both:
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Statistically reliable, and
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Economically meaningful after costs, taxes and model uncertainty.
On long samples, the estimated impact of sunspot cycles on annual S&P 500 returns is tiny:
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When you fit a simple linear model of annual S&P 500 total returns against annual sunspot numbers, the estimated slope is so small that moving from a low‑activity year to a very active year shifts the model’s expected return by less than 1 percentage point a year over the entire cycle.
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By contrast, the standard deviation of annual S&P 500 returns is roughly 15–20 percentage points, and single‑year swings of ±20–30% are common.
That means any “solar edge” is deeply buried in normal market noise. Once you factor in transaction costs, bid‑ask spreads, taxes, and the risk that historical patterns break down, the advantage is effectively untradable for a broad S&P 500 portfolio.
Even in the more optimistic NASDAQ‑focused study for 2015–2024, the authors themselves note that they are working with correlations in one decade, not a proven causal model. They explicitly warn that correlation‑based analysis has clear limits and that their findings are more about risk awareness (e.g., around solar maxima) than about mechanical timing rules.
Why correlation does not equal causation here
There are several reasons to be very cautious about jumping from “we see a correlation” to “we should trade on this”:
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Few independent cycles. A typical solar cycle is around eleven years. Over 150 years, there are only about fourteen full cycles—too few to robustly distinguish subtle patterns from chance, especially when the economy itself has gone through multiple regime shifts.
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Major structural changes. Over the long period used in these studies, monetary policy regimes, regulations, sector compositions, and global trade structures have changed dramatically. An effect seen in one sub‑period may not persist in another.
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Multiple candidate drivers. Many other variables move with time in ways that can mimic solar cycles—credit conditions, technology waves, demographics. Without strong identification, it is easy to attribute to the Sun what may actually be due to terrestrial forces.
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Lack of a single, dominant mechanism for S&P 500. While mechanisms exist for specific sectors (e.g., geomagnetic storms disrupting satellites, affecting tech and communications firms), the S&P 500 is a diversified index. Any solar‑related effect is diluted across hundreds of businesses with very different drivers.
In short, even if solar or geomagnetic variables add a small amount of statistical information, there is no convincing evidence that they are a primary cause of broad U.S. equity returns.
Where solar data might still matter
There are a few narrow contexts where paying attention to solar activity can make sense:
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Operational risk in sensitive sectors. Companies and investors in satellite services, telecommunications, GPS‑dependent industries, and power‑grid infrastructure have direct exposure to geomagnetic storms. For them, NOAA and NASA forecasts of upcoming solar maxima and storm probabilities are a genuine part of risk management.
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Tech‑heavy, short‑sample research. In the 2015–2024 window, the negative relationship between sunspot activity and NASDAQ performance is stronger than for the S&P 500. For a highly specialised quantitative strategy focused on technology indices, solar variables could be one of many features in multi‑factor risk models, but they are unlikely to stand on their own.
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Academic and educational use. The sunspot–stock‑market question is a good teaching case for spurious correlations, overfitting, and the difference between statistical and economic significance.
For most long‑term investors allocating to broad S&P 500 exposure via index funds or ETFs, these are edge cases, not core inputs.
Practical implications for investors
Based on the current state of research:
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For broad, long‑term S&P 500 investing, using solar activity as a primary timing tool is not justified by the data. Over long samples, sunspot counts and even geomagnetic indices explain at most a very small fraction of return variation, far below the influence of earnings, valuations, interest rates, inflation, and geopolitical events.
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For technology‑concentrated portfolios, awareness of solar maxima and major geomagnetic storm risk may have some value in risk monitoring, especially around operational vulnerabilities (e.g., satellites), but even here it should be regarded as one minor input rather than a dominant signal.
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For individual investors, the opportunity cost of focusing on solar cycles is real: time spent following sunspot data is time not spent understanding business fundamentals, diversification, fees, taxes, and behavioural pitfalls—all of which have a much larger effect on long‑run wealth.
In other words, the Sun may be an interesting research variable, but it is a poor substitute for discipline, diversification, and attention to economic fundamentals.
Risks and legal disclaimers
Because this article touches on investment‑related topics, some explicit warnings are necessary.
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No investment advice.
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This article is for informational and educational purposes only.
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It does not constitute investment, financial, trading, legal, tax, or any other professional advice.
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Nothing in this text should be interpreted as a recommendation to buy, sell, or hold any specific security, index, or financial instrument.
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No offer or solicitation.
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This content does not constitute an offer to sell or a solicitation of an offer to buy any financial product or service in any jurisdiction.
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References to indices such as the S&P 500, NASDAQ, SPY, or others are illustrative only and do not imply endorsement.
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Past performance and model risk.
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Past performance is not indicative of future results. Historical patterns in sunspot activity and market returns may change or disappear.
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Any statistical relationships described here are subject to data limitations, methodological choices, and sampling error. They may break down in future periods.
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Findings from individual studies, especially those using short time windows, may reflect overfitting, data‑mining, or omitted variables.
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Market risks.
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Investing in equities involves substantial risks, including market risk, sector risk, interest‑rate risk, inflation risk, liquidity risk, and political/regulatory risk.
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These risks are generally far larger in magnitude than any hypothesised influence of solar or geomagnetic activity. Investors can lose some or all of their capital.
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Responsibility and due diligence.
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Investors should base decisions on their own objectives, risk tolerance, financial situation, and investment horizon.
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Where appropriate, they should consult licensed financial advisors or other qualified professionals.
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Any use of solar or geomagnetic information in investment processes should be done cautiously, within a well‑diversified, risk‑controlled framework, and only as a small supplementary factor.
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Taken together, the evidence to date supports a clear conclusion: for mainstream investors in the S&P 500, solar activity is at most an academic curiosity and a minor risk‑management input for certain sectors—not a sound standalone basis for investment decisions.
