Solar cycle and the stock market: NASDAQ and S&P 500

How to read the chart

The blue line is the daily sunspot number; the other two lines are NASDAQ and S&P 500 in percent. Red areas mark headwind, green areas tailwind.

Marked events

Data sources

Sunspot numbers come from the NOAA Space Weather Prediction Center. We use the SESC series from Daily Solar Data via NCEI; the Kp index comes via NOAA Open Data. The SWPC JSON was not reachable. We do not use the SIDC International Sunspot Number here, so daily and smoothed values come from the same source. Data as of 15/08/2026, 18:10.

NASDAQ Composite and S&P 500 prices come from our own market database, the same one behind the Leeway API. Cycle turning points use the smoothed monthly value; spikes and return comparisons use daily data.

The study behind the page

Warren Wai Tong Kam: Solar Influences on Financial Markets. Toward Smarter Investment Decisions Across Indices, 2025. It covers four major equity indices on a daily basis for 2015 to 2024, plus longer histories at monthly and annual frequency.

It measures Spearman rank correlations between the sunspot number and the index level. On an annual basis ρ is −0.68 to −0.71 for the S&P 500 at a 1–3 year lead, on a monthly basis also −0.68 to −0.71 for NASDAQ at a 1–12 month lead, and on a daily basis −0.72 to −0.74 for NASDAQ with no lead and at a 1–10 day lead, each with p ≤ 0.001. That is a statistical association, not a cause.

The paper itself lists the main limits: confounders such as the macro backdrop, the rate regime or structural technology trends are not controlled, the monotonicity assumption hides non-linear and threshold effects, and the ten-year daily sample sits in a very specific monetary and fiscal setting. The factor is recommended for risk and scenario work, not as a standalone timing tool.

What our own backtest shows

We tested the signals against actual price paths. Excess is the return from the signal day minus the average return over the same horizon from a random day. A positive value means better than simply staying invested. Cycle extrema use the 36-month rule; spikes use the 2.5 standard-deviation threshold.

Two findings are stable: after a confirmed cycle low both indices beat buy-and-hold in year one; after a confirmed cycle high they lagged, most clearly at five years. One finding fails: single sunspot spikes show no measurable downward impulse; excess sits at zero. The last column matters: cycle signals rest on only four to six events because a solar cycle lasts about eleven years. That is too few for statistical confidence, however large the percentage looks.

Where we differ from the study

The study correlates the sunspot number with the index level. An investment decision needs the change. Two series can correlate strongly in levels while their returns are uncorrelated. That is what happens here: a long-term rising index meets a quantity that oscillates around a constant mean. We therefore use only returns from the signal day.

We show only NASDAQ and S&P 500.

We no longer assign a direction to sunspot spikes. We tested several variants, including clusters of spike days inside 15 days and a split by market regime via the 57-day moving average. No filter produced a pattern that held across the different samples.

What we therefore show, and how

We show cycle windows with a direction because the effect has a sign in our rerun: tailwind after a low, headwind after a high, each over five years and with the described reversal in the middle years.

We show sunspot spikes without a direction. They stand for a higher probability that trend or regime changes, and say nothing about which way.

We keep provisional extrema visibly separate from confirmed ones. A candidate appears after six months so the current phase can be read at all, but stays labelled unconfirmed until the full 36 months have passed. None of this is a trade signal. The factor belongs in scenario work beside valuation, the macro backdrop and market breadth.

Frequently asked questions

Does solar activity affect equity markets?

A statistical association is documented, not a cause. In our own rerun only the turning points of the solar cycle show a visible difference from ordinary market returns, and even there the number of events is very small.

What is a sunspot cycle?

The number of spots on the sun swings between a minimum and a maximum on a rhythm of about eleven years. The current cycle 25 began in 2019. On this page a high or low is confirmed only once no higher or lower smoothed reading appears for 36 months on either side.

What does a sunspot spike mean for the market?

A spike is a day with an unusually high sunspot number, at least 2.5 standard deviations above the mean of the previous 90 days. In our backtest neither a rise nor a fall follows on average. We therefore treat it only as a hint of a possible change in trend or regime, without a direction.

Can you time stocks with the solar cycle?

No. The findings that hold sit on a one-to-five-year horizon and rest on four to six events; short-term signals do not survive the test. The factor is useful as one of several views in scenario work.