August: A Historically Challenging Month for Stocks—2nd Worst Month
August has often been a challenging month for the stock market, and the data from 1988 through 2025 reinforces that seasonal caution. Ranked 11th among the calendar months, August has produced mixed results across the major indexes, with gains occurring only slightly more often than declines.
DJIA and S&P 500 each finished August higher in 21 of the past 38 years, or 55.3% of the time. Yet their average August performance remains negative, at –0.7% for the DJIA and –0.5% for the S&P 500. Russell 1000 also posted an average loss of –0.4%.
NASDAQ has fared somewhat better, advancing 57.9% of the time with a modest average gain of 0.1%. Small caps, however, have struggled, with Russell 2000 higher just 52.6% of the time and averaging a –0.4% decline.
Contributing to this poor performance since 1988 was the second shortest bear market in history (45 days) caused by turmoil in Russia, the Asian currency crisis and the Long-Term Capital Management hedge fund debacle ending August 31, 1998, with the DJIA shedding 6.4% that day. DJIA dropped 1344.22 points for the month, off 15.1%—which is the second worst monthly percentage DJIA loss since 1950.
Saddam Hussein triggered a 10.0% slide in August 1990. The best DJIA gains occurred in 1982 (11.5%) and 1984 (9.8%) as bear markets ended. Additional recent DJIA August losses in excess of 4% were in 2010, 2011, 2013, 2015, and 2022.
With August historically ranking near the bottom in market performance, traders and investors may want to temper expectations and remain alert for increased volatility as summer winds down.
