February Almanac: Performance Better in Midterm Years By: Jeffrey A. Hirsch & Christopher Mistal | January 22, 2026 | Email | Print

February is in the middle of the Best Six Months, but its long-term track record, since 1950, is not all that impressive. February ranks no better than sixth and has recorded meager average performance except for Russell 2000. Small cap stocks, benefiting from “January Effect” carry over in some years; historically tend to outpace large cap stocks in February. The Russell 2000 index of small cap stocks turns in an average gain of 1.0% in February since 1979, the sixth best month for that benchmark. Russell 2000 has had a banner January this year handily outpacing the other major indexes and appears to be benefiting from a strong “January Effect” this year. Should this momentum persist, Russell 2000 could continue to exhibit strength this February.

 

 

In midterm years, February’s performance improves with average returns generally increasing. Here again it is the Russell 2000 small-cap index that shines brightly, gaining 1.3% on average since 1982. DJIA and Russell 1000 tie for second best, averaging gains of 0.5% each, but DJIA enjoys the greatest frequency of gains. NASDAQ averages a gain of 0.4% (since 1974) while S&P 500 lags with average advance of 0.3% (since 1950).

 

 

The first trading day of February is bullish for DJIA, S&P 500, NASDAQ, Russell 1000 and 2000. Average gains on the first day over the most recent 21-year period (solid lines in above chart) range from 0.39% by DJIA to 0.78% by Russell 2000. However, after a strong opening day, positive momentum has tended to stall out until around the seventh or eighth trading days. From there until around the 12-trading day all five indexes have historically enjoyed gains. But those gains have not held through the end of February. Midterm-year February performance (dotted lines in above chart) has taken a different trajectory with weakness typically prevailing until around the sixth trading day, but afterwards the major indexes have demonstrated strength through the end of February with some consolidation around monthly options expiration and/or Presidents’ Day holiday.

 

Monthly options expiration week had a spotty longer-term record and was improving prior to the arrival of COVID-19 in 2020. Since then the week has been down four to six times depending on the index. S&P 500 and Russell 1000 have been down six weeks straight. Russell 2000 had resisted the negative trend in 2023 and 2024 but dropped 3.7% in 2025. The week after was also improving prior to 2020 but also appears to have returned to its bearish longer-term tendency.

 

Presidents’ Day is the lone holiday that exhibits weakness the day before and after (Stock Trader’s Almanac 2026, page 80). The Friday before this mid-winter three-day break can be treacherous and average declines persist for three trading days after the holiday going back to 1980. In recent years, trading before and after the holiday has been more bullish. S&P 500 has been up 10 of the last 15 years on the day before and NASDAQ has been up 8 of the last 13 years on the day after.