Hurricane Idalia currently has maximum sustained winds of just 75 miles per hour (MPH), but the storm is forecast to intensify as it barrels closer towards land, and by the time of the expected landfall on Wednesday morning, it is expected to have maximum sustained winds of 125 MPH making it a category-3 ‘major’ hurricane. Idalia is the 9th named storm of the 2023 hurricane season which still doesn’t reach its peak for another two weeks.

If Idalia does strengthen to a category-3 storm before making landfall, it will be the 19th major Atlantic hurricane to make a US landfall. The table below was created using information from Wikipedia and lists each of those prior storms with the most recent being Ian last September. Major hurricanes making landfall in the US have tended be sporadic over the last 30+ year. While there have been seven in the last six years, from late 2005 through August 2017, there was a nearly 12-year stretch without a single major hurricane making landfall.

Most hurricanes, even major ones, have an insignificant impact on the broader US economy. While Katrina, Harvey, and Ian had major impacts, a third of the 18 storms listed above didn’t even cause $10 billion in damages. We’d also note that for this analysis, we only looked at major hurricanes, so Super Storm Sandy didn’t make the cut even though it caused nearly $70 billion in damage. Even if they don’t ultimately have much of a lasting impact on the economy, we were curious to see if there were any trends related to market performance, so in the charts below we show the performance of the S&P 500 in the day and week after each of the prior hurricanes made landfall.

It may sound hard to believe, but the S&P 500 has tended to rally in the short-term following prior landfalls of major hurricanes on the US coast. On the day after the 18 prior landfalls, the S&P 500’s median gain was 0.32% with positive returns 72% of the time. One week later, performance was even stronger at 1.22% with gains 83% of the time. This could all be coincidence more than anything else, but given the preparations that go into storms like these, the costs involved can have a short-term stimulatory impact.

More By This Author:

SEC Loss Supercharges Bitcoin (GBTC)
Gassy Summer
Energy Holds Above Their 50-DMAs