Historical trends tell us that the markets do not generally perform very well in February. The charts below show the average monthly performance of the four major U.S. market indices over the last 30 years from 1995 to 2025 (Figures 1–4). These analyses were done with our Market Index Performance analysis tool.
A quick examination of Figures 1–4 suggests that the markets do not generally exhibit their strongest performance during the month of February. In this historical context, February 2025 is no exception.
We as humans have recency bias. We tend to believe that the most recent behavior of the markets is the norm and benchmark for all future performance. Given our disappointment with market performance in February 2025, and to check our own recency bias, we wanted to see if the losses observed during this month were among the top losses seen in recent history.
For this analysis, we used our Largest Fluctuations in Market History analysis tool to see when the largest daily losses occurred since January 1, 2023. We chose 2023 as the start of this analysis simply because the performance of all four major market indices in 2023 and 2024 was well above their historical averages. Table 1 below summarizes the performance of the major U.S. market indices in 2023 and 2024. Note that these analyses can be readily done with our Market Index Performance analysis tool.
Figures 5–8 show the top 10 largest single-day losses for the four major market indices between 1/1/2023 through 2/28/2025. As can be seen, the market index losses seen in February 2025 do not rank as among the largest single-day losses since 1/1/2023.
For the S&P 500 index, the loss on 2/21/2025 (−1.7%) is the 10th largest single-day loss since 1/1/2023. For the Dow Jones Industrial Average index, the loss on 2/21/2025 (−1.7%) is the 6th largest loss. For the Nasdaq Composite index, the loss on 2/27/2025 (−2.8%) is the 6th largest loss. For the Russell 2000 index, the loss on 2/21/2025 (−2.9%) is the 9th largest loss.
The above analysis can also be done using "week" as the time window. In this case, the general observations noted above continue to hold.
Finally, we noted that it was not all bad news in February 2025. In fact, the S&P 500 index had two all-time high records in February 2025 (Figure 9). This analysis was done by using our All-Time High Records in Market History tool.
Summary
While we remain disappointed with the February market performance, our analysis reveals that the recent market index declines in February 2025 are by no means the worst we have seen recently. While our observations do not explain the immediate drivers of the downward trends seen in February 2025, they do provide historical insights and perspectives related to lackluster market performance during the month of February. Our hope is that these observations will help shape and broaden our understanding within a historical context of market performance.
To gain additional historical insights about market index performance, use any one of our Market Index Analysis tools.
Saturday, March 1, 2025
