U.S. Stock Market Rallies to Best August in Decades

Investors following the old “sell in May and go away” adage will be fuming this year, after the U.S. stock market followed up a strong second quarter with an equally strong summer capped off by the best August in decades.

Driven by vaccine hopes, strong tech stocks and pre-split rallies by Apple and Tesla, U.S. market indices climbed through large parts of August, a month generally known for modest returns. The Dow Jones Industrial Average and S&P 500 ended the month up 7.57 and 7.01 percent, respectively, marking their strongest August performance since 1984 and 1986. The tech-heavy Nasdaq Composite Index even climbed 9.59 percent in August, its best summer showing since August 2000.

As for the aforementioned adage, it has been shown that going away in May isn’t the best investment advice any longer. While returns have historically been lower between May and October compared to the November-April period, an analysis by LPL Research has shown that the S&P 500 delivered positive returns in 7 out of 9 years since 2010 and unless we’re seeing a major dip in the two months ahead, 2020 will continue that trend.