Beginnings are important. That's true whether we're talking about books, movies, or marriages. And it applies to stocks, too. How the stock market begins a given year can be telling about how it will finish it.

As of April 30, 2025, the S&P 500 (^GSPC 1.47%) was off to its eighth-worst start in 50 years. Here's what history says stocks could do next.

Image source: Getty Images.

Joining an unwanted club

Stocks began 2025 on a positive note. The S&P 500 jumped 24% in 2023 and another 23% in 2024. This momentum seemed set to continue. Then, investors realized that President Trump wasn't just making idle threats about levying steep tariffs; he was dead serious.

The S&P 500 began to lose its mojo in late February. However, President Trump's so-called "Liberation Day" announcement in early April of high reciprocal tariffs on nearly every country in the world caused an instant market meltdown.

Although the major index has rebounded somewhat since then, it was still down roughly 5.3% year to date at the end of April. The S&P 500 has begun a year with a greater decline only seven previous times since 1975.

The most recent example occurred in early 2022 as the Federal Reserve's interest rate hikes caused stocks to plunge 13.3% in the first four months of the year. Two years earlier, the S&P 500 sank nearly 10% with the COVID-19 pandemic affecting the world.

We have to go back to 2008 for the next time the S&P 500 started the year worse than it has in 2025. The early brewing of the financial crisis resulted in stocks tumbling around 5.6% by the end of April. The dot-com bubble burst also sent the S&P 500 down 5.4% and 6.2% in the first four months of 2001 and 2002, respectively.

Stocks fell roughly 6.4% between Jan. 1, 1990, and April 30, 1990, as a precursor to a recession that contributed to George H. W. Bush being a one-term president. The only other worse start for the S&P 500 came in 1977, with the index dropping 8.4% in the first four months of the year that former President Jimmy Carter took office.

How stocks performed following previous ugly starts

Ugly starts to the year for the S&P 500 usually lead to ugly finishes. The worst example was in 2008. The S&P 500's initial decline of 5.6% was nothing compared to what followed. By the end of the year, the index had plunged almost 38.5%.

^SPX data by YCharts

The dot-com bubble burst also ignited a steep sell-off. After beginning the first four months of 2001 and 2002 down, the S&P 500 fell by double-digit percentages by the end of both years.

^SPX data by YCharts

The S&P 500 slid into a bear market for a while in 2022. It bounced back some late in the year, but still finished down 19.4%.

^SPX data by YCharts

It was a similar story in 1977 and 1990. In both cases, the S&P 500 finished the year down more than it was during the first four months.

There has been one -- and only one -- time in the last 50 years when the S&P 500 began the first four months down more than it is in 2025, but finished the year with a positive gain. This lone outlier came in 2020. Many investors correctly saw the COVID-19 pandemic as a temporary problem and quickly scooped up stocks that had sold off. The S&P 500 went on to deliver a return of nearly 16.3% after the decline earlier in the year.

^SPX data by YCharts

Will history repeat itself?

In seven of the eight times the S&P 500 began the year with a sharper decline than what we've experienced in 2025, the index ended the year down even more. Will history repeat itself? Possibly.

U.S. GDP fell 0.3% in the first quarter of 2025. This has raised concerns that the economy could enter a recession. Consumers have yet to feel the full brunt of potential inflation from the Trump administration's steep tariffs, but consumer confidence is already at its lowest level in 14 years.

However, the market sell-off this year is an anomaly because it's largely self-inflicted. Should the White House (or the federal courts) end the steep tariffs and the economic uncertainty they're causing, the S&P 500 could take off. Unless there's some sort of reprieve, though, history isn't on investors' side over the short term.

The good news is that history is definitely on investors' side long term. The S&P 500 has delivered a cumulative total return of 3,220% since it launched in its current form with 500 companies in March 1957.