The S&P 500 Index¹ advanced 76% in the first year of the new bull market (S&P 500 data St. Louis Federal Reserve). We’re now in year 2.

How have bull markets performed in the second year? Reviewing the last 10 bull markets dating back to 1957, the S&P 500 Index has averaged a 13% advance in the second year (LPL Research).

But it’s not been without drama. The average peak-to-trough pullback during year 2 has averaged 10%. 

A Google search of the word “inflation” has more than doubled since the beginning of the year. It’s up more than three-fold since last summer, according to Google Trends, as of May 9. 

April’s Consumer Price Index was a shocker.

• The CPI rose 0.8%. Excluding food and energy, prices jumped 0.9%, the fastest monthly reading in 40 years (U.S. BLS).

A debate is raging whether the recent spike is temporary, as the Federal Reserve argues, or something more worrisome.

While a 1970s-style price spiral seems remote, what might be the consequences for investors?

The U.S. BLS reported last week that the Consumer Price Index (CPI) jumped 0.8% in April vs March. The so-called core CPI, which excludes food and energy, rose 0.9% in April, the fastest monthly pace in 40 years.