February Stock Market History: Patterns and Performance

February has historically been a mixed bag for the stock market, with some years delivering impressive gains and others ending in losses. The month's performance is often influenced by the state of the economy and the direction of interest rates.

February's average return since 1928 is a modest 0.8%. This is slightly lower than the overall market's average return over the same period.

The S&P 500's best February performance was in 1976, with a gain of 6.5%. Conversely, the worst February performance was in 2009, with a loss of 8.5%.

See what others are reading: Average Stock Market Return

February is often considered one of the worst months for the stock market, based on historical data.

The NYSE Composite has seen a decline in 35% of the months in February over the last 20 years, with an average loss of -1.4%. February is also listed as one of the worst months for the NYSE Composite over the last 10 years.

A different take: Stock Market History Chart Last 100 Years

The Nasdaq 100 has fared slightly better, but still shows a decline in 30% of the months in February over the last 20 years, with an average loss of -1.1%. February is also listed as one of the worst months for the Nasdaq 100 over the last 20 years.

Here are the worst months for the NYSE Composite and Nasdaq 100 over the last 10 and 20 years:

February is often considered one of the worst months for the stock market. February is, on average, the second-worst month for the S&P 500, trailing only September for the lowest monthly average return over the last 100 years.

In recent years, the S&P 500 has actually performed well in February, with a 3.8% gain so far this year. However, this is not always the case, and February has been a tough month for many stocks in the past.

The Nasdaq Composite has also had a poor February in the past, with February topping the list of worst months in the years dating back to 2000. This is particularly concerning given the tech-heavy nature of the Nasdaq.

Some individual stocks have even performed particularly well in February, such as Nvidia, which is up 27%, and Super Micro Computer, which is up 49%. However, not all stocks have been winners, with Rivian down 32% and Snap down 33%.

Here are the worst months for the NYSE Composite and Nasdaq 100 over the last 20 years:

It's worth noting that these are general trends and not all years will follow this pattern. However, by understanding these seasonal patterns, investors can make more informed decisions and potentially avoid some of the pitfalls that come with investing in the stock market.

The pre-holiday rally is a pattern worth noting, especially for short-term traders. This involves buying stocks one to two days before a long weekend or holiday and selling one to two days after.

Trading volume tends to be lower heading into long weekends, which may help explain prices drifting up due to a long-term upward bias to the stock market.

Some holidays are more reliable than others for producing positive returns over time. According to QuantifiedStrategies, most holidays don't produce a big pop in stocks, but a few are more reliable.

Longer-term traders can also take advantage of the pre-holiday rally by picking up stocks they were eyeing one to two days prior to a holiday.

February might be great for romance, but it stinks for the stock market. Or, so says history.

February is typically when the stock market hits a snag.

However, is that the case this year? Let's take a look at how things are shaping up and what investors may want to do about it.

The S&P 500 Index data by YCharts shows a pattern that's hard to ignore.