S&P 500 has risen in July for 11 consecutive years: Can the seasonal pattern continue against the backdrop of record highs?

In the capital market, truly time-tested patterns are rare. However, the "July Effect"—the S&P 500's significantly better performance in July compared to other months—is one of the few seasonal patterns repeatedly confirmed by decades of data.

As of July 3, 2026 (Beijing time), the S&P 500 closed at 7,483.24. This level itself is already a historical high—since the start of 2026, the index has set 24 new all-time closing highs. Behind these numbers, a more noteworthy pattern is being confirmed once again: the S&P 500 has posted positive returns in July for 11 consecutive years, setting a record for the longest consecutive positive returns in that month.

For crypto asset investors, understanding the seasonal structure of traditional financial markets also holds reference value. The pricing logic of risk assets transmits across different markets—seasonal strength in U.S. stocks is often accompanied by improved liquidity and a phase of increased risk appetite. These macro factors similarly influence the short-term pricing environment of the crypto market. A systematic review of this seasonal pattern is conducted from four dimensions: historical data, current market conditions, sector rotation, and cross-asset linkages.

Eleven Consecutive Years of Positive July Returns: A Deep Dive into the Data

Historical Win Rate: According to Carson Research, the S&P 500 has risen in July for 11 consecutive years. This winning streak is the longest among all months currently and the second-longest monthly winning streak in the past 69 years, trailing only the 13-year streak from May 1985 to May 1997.

Average Gain: Since 2005, the S&P 500's average gain in July has been 2.5%—more than four times the average monthly gain of the remaining 11 months. Across different statistical periods, July's performance remains outstanding: the average gain over the past 10 Julys is about 3.5%; over the past 35 years, it's 1.4%; and looking at the long-term data from 1928 to the present, July is the S&P 500's best-performing month of the year.

Monthly Ranking: Over the past 20 years of data, July is the best-performing month for the S&P 500; over the past 10 years, July ranks second, behind only November.

The implication of this data set is clear: July's strength is not a random fluctuation but a statistically significant seasonal pattern. However, it must be emphasized that historical patterns do not constitute a prediction of the future—seasonal patterns can be disrupted when macroeconomic conditions change.

The Special Context of 2026: After 24 New Highs

July 2026 has a special backdrop unlike previous years.

As of July 3 (Beijing time), the S&P 500 has set 24 new all-time closing highs in 2026. On June 2, the index broke through the 7,600-point mark for the first time, reaching an intraday high of 7,616.2. Although the index fell 1.3% overall in June, the cumulative return for the second quarter was still close to 15%.

This pattern of "new highs followed by more new highs" is not uncommon historically. Based on historical data backtracking: after similar streaks of consecutive gains, the S&P 500's average return over the next six months exceeds 6%. J.P. Morgan research shows that since 1950, the S&P 500 has been at all-time highs about 6.7% of trading days, and about 29.2% of those peaks became starting points for new rallies.

Another set of noteworthy data comes from statistics on returns over different time windows after all-time highs: one month after a new high, the market continues to rise 60% of the time; after three months, the probability rises to 68%; after six months, to 75%; and after two years, to about 84%.

Of course, the flip side of these statistics is also worth noting: in the six-month window after a new high, the worst-case drawdown can reach 12.2%. The direction pointed by historical probabilities is clear, but tail risks are equally real.

Sector Rotation: Who Leads in July?

The seasonal strength in July is not evenly distributed across all sectors. Historical data reveals clear sector rotation characteristics.

Technology Sector: The information technology sector has the most outstanding historical performance in July. Data from the past 10 years shows that July is the best-performing month for the tech sector on average, with an average gain of 4.85%.

Financials and Consumer Discretionary: The financial sector has an average historical return of 1.61% in July, achieving positive returns in 16 of the past 25 Julys. The consumer discretionary sector also shows stable excess returns in July.

Industrials and Real Estate: The industrial and real estate sectors also have a place in July's historical rotation.

Market movements in early July 2026 have already validated this rotation pattern to some extent. On July 1-2 (Beijing time), the market exhibited clear sector rotation—funds moved out of previously leading semiconductor and AI-related sectors into previously lagging sectors like financials and industrials. The equal-weight S&P 500 has risen 11.7% year-to-date in 2026, while the market-cap-weighted S&P 500 has gained 8.9%—this gap itself shows that the 2026 rally is broadening from top tech stocks to a wider range of sectors.

Market data on July 3 (Beijing time) further confirms this trend: the healthcare sector led with a 1.2% gain, the technology sector rose 1.0%, and the materials sector gained 1.9%. The simultaneous strength across multiple sectors is an important foundation for the sustainability of the rally.

Macro Environment: Three Logics Supporting July's Rally

Behind seasonal patterns, there are usually verifiable macro logics. The strength of U.S. stocks in July can be explained from the following dimensions.

Pre-Earnings Expectation Window: July marks the start of the second-quarter earnings season in the U.S. stock market. Historically, the first half of July is usually a peak period for companies to release earnings pre-announcements, and market expectations for earnings growth are often priced in during this phase. Current market expectations for S&P 500 second-quarter earnings growth year-over-year are close to 24%, covering multiple industries including technology, communications, industrials, financials, and consumer discretionary.

Monetary Policy Communication Void: The Federal Reserve is typically in a quiet period before the FOMC meeting in July, meaning the lack of new policy signals results in relatively low market uncertainty. The FOMC meeting on July 28-29 (Beijing time) will be the next key policy event.

Fund Reallocation Effect: Sectors that performed well in the first half of the year often face rebalancing pressure from funds entering the second half, while sectors that lagged in the first half may attract incremental capital. The sector rotation in early July 2026—from tech to financials and industrials—is a manifestation of this mechanism.

Conclusion: The Value and Limits of Patterns

The S&P 500's 11 consecutive July gains are a seasonal pattern repeatedly validated by historical data. The backdrop of 24 new all-time highs so far in 2026 has drawn more market attention to this year's July performance.

The direction pointed by historical data is clear: July is one of the best-performing months for U.S. stocks; after a period of consecutive gains, the index's average return over the next six months exceeds 6%. But the value of historical patterns lies not in prediction, but in providing investors with a verifiable reference framework.

For crypto asset investors, understanding the seasonal structure of U.S. stocks and cross-asset pricing logic helps build a more complete analytical framework in the macro-to-risk-asset transmission chain. However, no single-dimensional pattern should be overemphasized—variables such as macro policy direction, the true substance of corporate earnings, and institutional fund flows together form a more complex pricing equation than seasonal patterns alone.

July's market is unfolding, and the data will provide the final answer.

FAQ

Q1: Is the data correct that the S&P 500 has risen in July for 11 consecutive years?

Yes. According to Carson Research, the S&P 500 has posted positive returns in July for 11 consecutive years. This is the longest winning streak for the index in July and the second-longest monthly winning streak in the past 69 years. Since 2005, the average gain in July is 2.5%, more than four times the average gain of the other 11 months.

Q2: What does it mean that the S&P 500 has set 24 new highs in 2026?

As of July 3 (Beijing time), the S&P 500 has set 24 new all-time closing highs in 2026. Historical data shows that after similar consecutive rallies, the index's average return over the next six months exceeds 6%. However, historical patterns do not guarantee future performance, and changes in macroeconomic conditions could alter this pattern.

Q3: Which sectors typically perform better in July?

Historical data shows that the technology sector has the most outstanding performance in July, with an average gain of 4.85% over the past 10 years. Financials, consumer discretionary, industrials, and real estate also have good historical performance in July. Market movements in early July 2026 have already shown signs of rotation from tech to sectors like financials and industrials.

Q4: What are the main risks for the July market?

Key risks include: policy uncertainty from the FOMC meeting on July 28-29 (Beijing time); the probability of zero rate cuts for the full year 2026 has risen to about 40%; the spot Bitcoin ETF saw a record net outflow of $4.06 billion in June; and the worst-case 12.2% drawdown in the six-month window after all-time highs.