Post-Storm Analysis: How Weather Events Affect Investable Indices and Sectors

In this article we take a look back at the impact of Winter Storm Fern last month to evaluate the impact on broad financial indices. We also break down how additional weather events such as the Southern California Wildfires, Texas Winter Storm Uri, and Texas Hurricane Harvey impacted returns at the index, sector, and industry levels. This historical analysis provides a basis for stress-testing investment strategies.

U.S. Winter Storm Fern 2026

The main investable indices had negligible reactions to the major winter storm that swept across the southern and eastern U.S. last month, but there was a rise in the price of oil and natural gas due to the disrupted supply and increased demand. 

That said, unrelated events shortly before and after the storm’s peak impacted equity and bond indices, including news of the U.S. potentially imposing tariffs on some European countries and the nomination of the next Chair of the U.S. Federal Reserve. 

Let’s take a closer look at cumulative returns over the week of the storm.

Bonds

As noted in the table below, returns across U.S. broad bond investable indices were not impacted. As we see in the additional analysis later in this article, fixed income assets are typically less responsive to weather events in the short-term. However, there may be some longer-term impacts based on issuance of new debt for repair and reconstruction from weather damage.

Cumulative returns of broad bond indices during the 2026 U.S. winter storm

Equities

As reflected in the table below, the U.S. broad equity index did not lose cumulative returns during the storm week. However, specific industries experienced losses. For example:

• The Automobiles & Components industry realized a -6.1% market downturn during the period, due to significant logistical and transportation bottlenecks from ice, snow, and extreme cold across the southeast and northeast.

• Consumer Durable and Commercial Services lost around 3% market value from business closures, logistics disruptions, and lower demand for non-critical goods. 

Some of the losses we see in the below table are not related to the storm. For example, the Healthcare sector loss reflected the forecasted revenue decline in a major healthcare insurance company, which led to a sell-off of this company and its sector peers. In another sector example, the Software and Services drop of -4% also was not caused by the winter storm. Rather, the loss reflected technology companies’ earnings results and fears of AI impact on large technical companies’ business models.

Cumulative returns of a broad equity index during the 2026 U.S. winter storm

Weather disasters can be costly given the disruption, damage, and destruction they inflict along with the recovery expenses. They may hit particular industries or businesses more severely, such as insurance firms with large losses or the real estate sector with impacts on properties. 

Overall, the short-term impact of weather events on investable equity and bond indices is often small. 

Historical Analysis of Additional Events

To broaden the historical perspective on weather events in the U.S. and to examine the short-term reaction of a few investable indices, we have selected several of the costliest events.

Below we analyze the response of the indices in the first week of each event, which reflects the most acute shock to the investments. The indices include the main investable U.S. markets: equities, U.S. Treasuries, U.S. corporate bonds, and U.S. high-yield bonds. We report the top-level percent return of each of the indices and provide a detailed heatmap view of the dynamics of the industries within the equity asset class as well as the asset sub-classes within the bond universe.

Southern California Wildfires 

Period: January 7-14, 2025

Impact on main indices: 
U.S. broad bond indices dropped around 0.5%, including Treasuries, corporate bonds, and high-yield bonds. It was not a large drop, but the direction and size of the drop was consistent across all three asset classes.

Cumulative returns of broad bond indices in the first week of the 2025 Southern California wildfires

Equity large cap indices dropped 1%. Apart from the direct impact on insurance and real estate given expected losses and destruction of property, respectively, additional industries suffered large losses. For example, Semiconductor and Semiconductor Equipment’s return of -4.5% and the related Technology Hardware & Equipment Industry’s return of -3% in the first week of the fires reflects the dependency of the supply chain on semiconductors from that location.

Cumulative returns of a broad equity index in the first week of the 2025 Southern California wildfires

Texas Winter Storm Uri

Period: February 15-19, 2021

Return on main indices: 

U.S. Corporate and Treasuries broad bond indices dropped 0.8%-0.9% while the high-yield bonds index return was -0.3% over the first week of the winter storm.

Cumulative returns of broad bond indices in the first week of the 2021Texas winter storm

U.S. broad equity indices dropped 0.7%. Some industries are more impacted, such as Automobiles & Components and Technology Hardware & Equipment. Those industries dropped -3.5% after the closure of manufacturing facilities and disruptions in the production process.

Cumulative returns of a broad equity index in the first week of the 2021Texas winter storm

Texas Hurricane Harvey

Period: August 16-24, 2021

Return on main indices:

U.S. broad bond indices barely reacted, with returns close to 0%.

Cumulative returns of broad bond indices in the first week of the 2017 Hurricane Harvey

U.S. broad equity indices dropped 0.6%. The most impacted industries were Consumer Durables & Apparel, Consumer Services, and Transportation with returns of -4.5%, -3.5%, and -3.9%, respectively, during the first week due to production and logistics disruptions and the closures of warehouses, roads, and manufacturing facilities.

Cumulative returns of a broad equity index in the first week of the 2017 Hurricane Harvey

Conclusion

Analysis of the historical weather events shows that short-term reactions of broad investable indices are usually very small for bonds. Broad investable equity indices usually show some loss, but it’s not too notable. However, based on the geographic spread of a weather event, particular industries could be more affected and suffer larger losses due to disruptions in production processes or logistics. 

All of the above historical events can be defined as historical scenarios and run as stress tests in the FactSet Portfolio Analytics application to test the resilience of specific investments or investment strategies.

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.