AI Overview
Historically, February is a weak and often volatile month for the US stock market, acting as a transition period where the initial "January effect" fades and market focus shifts to Q4 earnings and economic data
. It is widely considered one of the weakest months for performance, with the S&P 500 often posting nominal average gains and higher volatility.
Key February Seasonal Trends

1. Performance: February is characterized as a "stumble" for the winter rally, with the S&P 500 averaging a gain of only 0.1% to 0.19% over the past few decades.
2. Weakest Sector: The Nasdaq 100 often fares poorly, with February being the only month of the year where it has recorded more losses than gains since 1985.
3. Volatility: The Cboe Volatility Index (VIX) tends to rise, averaging a 5.5% increase since 1990, indicating increased investor caution.
4. "Higher then Lower" Pattern: A common pattern is for the market to start with some strength before retreating in the latter half of the month as earnings results are digested.

Exceptions and Specific Asset Trends

1. Outperforming Stocks: While the broader market often stalls, specific stocks have shown strong February performance, with Booking Holdings (BKNG) and Nvidia (NVDA) identified as having consistent, high-percentage positive trends.
2. Cyclical Stocks: Materials, Industrials, and certain Energy stocks (like Freeport-McMoRan) have shown a tendency to perform well in February, potentially benefiting from economic growth narratives.
3. Small Caps: Small-cap stocks (Russell 2000) may experience consolidation after leading in January, as seen by the RTY/SPX ratio easing in late January.