Chief Market Strategist at Carson Research, Ryan Detrick, is advising S&P 500 investors to prepare for seasonal headwinds, cautioning that markets should brace for August and September, as they are historically the “worst two months” of the year. The warning follows a rare back-to-back monthly decline for the index in June and July.

Historical Red Flags After Summer Drop

The S&P 500 ended July down 0.1% after dropping 1.1% in June, snapping an 11-year July win streak. According to Carson Investment Research data, consecutive losses in June and July are a “dubious distinction” shared by infamous market years like 1974, 1990, 2001, 2002, and 2008.

“Prepare to hear a LOT about this from the bears, but down in June and July has been weak for the rest of the year historically,” Detrick noted. When these two months fall, the rest of the year drops more than half the time, posting an average decline of 2.5%.

Seasonal Volatility and Midterm Jitters

The seasonal calendar adds further reason for vigilance. Detrick highlighted that August and September frequently deliver out-of-the-blue disruptive events that rock global markets, particularly during a midterm election year.

The recent momentum and semiconductor crash in July may signal that typical midterm volatility has arrived early. Investors are urged to prepare now for potential chop, especially as markets test Federal Reserve leadership.

Long-Term Bullish Outlook Intact

Despite short-term seasonal risks, Detrick maintains a broader bullish stance for the rest of 2026, expecting S&P 500 gains between 15% and 18% by year-end. –

Solid underlying fundamentals—including strong second-quarter corporate earnings and broad market participation—support the long-term uptrend. The NYSE common stock advance/decline line recently hit an all-time high, proving market breadth remains on firm footing.

Detrick advises investors against panicking during seasonal weakness, pointing to historical strength in the fourth quarter of the presidential cycle as a catalyst for better times ahead.

How Have Markets Performed In 2026?

The S&P 500 index has advanced 9.20% year-to-date. Similarly, the Nasdaq Composite index was up 9.20%, and the Dow Jones gained 8.48%YTD.

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq 100, respectively, closed higher on Friday. The SPY was up by 0.72% at $747.03, while the QQQ advanced by 0.65% to $687.99.

Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), closed up 0.54% at $524.32 on Friday.

In premarket on Monday, SPY was up 0.51%, QQQ rose 0.34%, and DIA was up 0.82%.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via Shutterstock