U.S. stocks are wrapping up a good November that saw equities to bounce off their 2022 lows set in October, with optimism building that the momentum will cement a year-end rally.
Indeed, there’s been a lot of talk about seasonal tailwinds and how they might — or might not — work to the advantage of stock-market bulls next month. While historical data is only a rough guide, December’s track record is an impressive one when it comes to the “winning percentage” for the Dow Jones Industrial Average
DJIA,
the S&P 500
SPX,
and the small-cap Russell 2000
RUT,
The Nasdaq Composite’s
COMP,
December performance isn’t too shabby either, as the chart below from Dow Jones Market Data illustrates.
Dow Jones Market Data
Of course, averages and other historical data are a rough guide at best. Some investors, no doubt, have bad memories of the market’s 9.2% December 2018 plunge.
With that caveat in mind, here’s a broader breakdown on how major indexes tend to perform in the final month of the year.
- The Dow Jones Industrial Average is up 71% of the time; it’s highest winning percentage of any month
- The average December return for the Dow is 1.4%, second only to July
- The S&P 500 is up 73% of the time; it’s highest winning percentage of any month
- The average December return for the S&P 500 is 1.4%, 3rd best month on average
- The Nasdaq Composite is up 61% of the time
- The average December return for the Nasdaq Composite is 1.7%, 3rd best month on average
- The Russell 2000 is up 83% of the time; it’s highest winning percentage of any month
- The average December return for the Russell 2000 is 2.8%; the best average return for any month
The chart below illustrates how December returns stack up historically:
Dow Jones Market Data
The Dow was on track for a 5.2% monthly rise in November, with the S&P 500 up 4.9% and the Nasdaq Composite gaining 3.8%.
