May Almanac:
Second Worst S&P 500 Month
in Pre-Election Years

May has been a tricky month over the years, a well-deserved reputation following the May 6, 2010 “flash crash”. It used to be part of what we once called the “May/June disaster area.” From 1965 to 1984 the S&P 500 was down during May fifteen out of twenty times. Then from 1985 through 1997 May was the best month, gaining ground every single year (13 straight gains) on the S&P, up 3.3% on average with the DJIA falling once and two Nasdaq losses, notes Jeff Hirsch, editor, Stock Trader’s Almanac and Almanac Investor eNewsletter.

In the years since 1997, May’s performance has been erratic; DJIA up fourteen times in the past twenty-five years (four of the years had gains exceeding 4%).

Nasdaq suffered five May losses in a row from 1998-2001, down –11.9% in 2000, followed by thirteen sizable gains of 2.5% or better and seven losses, the worst of which was 8.3% in 2010 followed by another substantial loss of 7.9% in 2019.

Since 1950, pre-election-year Mays rank poorly, #10 DJIA, #11 S&P 500, #8 Nasdaq, #8 Russell 1000 and #7 Russell 2000. Historically bullish pre-election forces do not consistently lift May.

Four of the nine S&P 500 pre-election year May declines exceeded 4%, the worst was a 6.6% loss in 2019. Russell 2000 gained 10.6% in May 2003, notably boosting its average gain and ranking.

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