The S&P 500 (SPY) has a history of strength in January and then it has a history of being kind of weak in February. This is exactly the pattern that is playing out in 2026.
The S&P 500 got off to a good start in January gaining 1.4%. Since then, the index is down about 1%, leaving the S&P 500 with a small gain on the year.
This pattern isn’t unusual. September and February are the only two months of the year that average a negative return since 1950, the last 20 years and the last 10 years. Below is an informative chart from financial research firm Carson Research.
Tech Has Been Weak in 2026: The technology sector has been relatively weak in 2026. Tech got off to a good start in January with the NASDAQ 100 (QQQ) gaining 3%. Since then the NASDAQ 100 has fallen 5% and is down 2% on the year. This weakness in tech is being driven by a few key factors.
Tech stocks are up a lot in the last three years and investors are sitting on big gains. Some of the recent weakness is profit taking and that is pretty normal, nothing to seriously worry about.
The second factor weighing on tech stocks this month is the threat of AI disruptions – particularly related to software companies. Some of these concerns are legit and some are exaggerated.
For the time being I remain optimistic on the NASDAQ 100 and the tech sector. This is an area where me and my wealth management clients remain overweight. Looking forward I am expecting the NASDAQ to deliver another good year in 2026. If my outlook changes I will be looking to make adjustments and trim tech and rotate that cash into other sectors.
What Should We Expect Moving Forward? So far in 2026 we are seeing a regular amount of volatility in the S&P500 and broader stock market. The tech sector has been relatively weak but long term I remain optimist tech will do well. I also remain optimistic that the S&P 500 will have another good year in 2026. For the time being I am not making any major adjustments on client portfolios – if that changes my clients and readers will be the first to know.
I’ll be back with another update next week – have a great day!
Disclaimer: This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. is not a broker/dealer. We do not receive compensation for mentioning stocks. At various times, the clients, publishers and employees of Vodicka Group, Inc., may buy or sell the securities discussed for purposes of investment or trading.
