The S&P 500 Is Down 4% in 2026. Here Is What Long-Term Investors Should Do Now.

It’s been a turbulent year for the stock market. The S&P 500 (SNPINDEX: ^GSPC) index has been hurt by worsening sentiment. It could be from the Middle East conflict, the acceptance of higher interest rates for longer, or general uncertainty.

As of April 1, the widely followed benchmark is down 4% in 2026. This is after it produced a total return of 18% in 2025. The slow start can keep some market participants on edge.

Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »

Long-term investors shouldn’t panic, though. Here’s the right approach.

Image source: Getty Images.

Over the past decade, the S&P has generated a total return of 277%. On an annualized basis, this means your capital compounded at a 14.2% rate. This is a wonderful outcome, and it’s substantially higher than the longer-term historical 10% yearly average.

Despite that impressive performance, investors who captured this gain had to deal with sizable occasional drawdowns. For example, the S&P posted double-digit percentage drops in 2018, 2020, 2022, and 2025. The benchmark always recovered, showing that volatility is normal in the world of stock market investing.

In order to be successful, it’s crucial to adopt a mindset that allows you to ignore the short-term noise. That’s because the S&P 500 will continue to have periods of weakness.

How you navigate those times will undoubtedly affect your financial well-being. The best course of action during moments like now is usually to ride out the volatility and stay focused on the next five years and beyond.

When it seems that everyone is selling their positions and running for the exits, the smartest investors keep a level head. “Be greedy when others are fearful,” the legendary investor Warren Buffett once said. While the S&P 500 takes a breather, it’s time for investors to seriously consider putting some extra cash to work.

While the market is on the dip, investors will want to look at buying the Vanguard S&P 500 ETF (NYSEMKT: VOO) right now. It’s an extremely low-cost option, charging an expense ratio of 0.03%, that provides investors with access to the S&P 500. This is a solid choice at any time, but it’s particularly interesting today since it’s off 4% this year.

Investors can also identify individual stocks that are taking it on the chin. Alphabet and Meta Platforms, both outstanding businesses, have seen their share prices fall 5.5% and 13%, respectively, in 2026. They are down even further from their all-time peaks. Opportunistic investors probably don’t want to pass up on these two top artificial intelligence stocks. Those who are in it for the long term will take advantage of what the market is offering.

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

  • Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $460,126!*

  • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $48,732!*

  • Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $532,066!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of March 23, 2026

Neil Patel has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

The S&P 500 Is Down 4% in 2026. Here Is What Long-Term Investors Should Do Now. was originally published by The Motley Fool

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