February is on track to become the tech sector’s worst-performing month in nearly a year, as a sharp selloff in software stocks weighs on the broader technology complex.
While the move has rattled investors accustomed to tech leadership, history suggests the weakness should not come as a surprise.
Seasonally, February has long been one of the most challenging months for tech equities.
While September remains the worst month for stocks overall, February follows closely behind.
“February is one of two months — September being the other — that is negative on average since 1950, over the past 20 years, and over the past 10 years,” said Ryan Detrick, chief market strategist at Carson Group LLC.
February: When The Winter Rally Stumbles
For technology stocks in particular, February carries an unusual and persistent pattern.
It is the only month of the year in which the Nasdaq 100 has recorded more losses than gains.
Since 1985 — the year the Nasdaq 100 was launched — February has posted a winning rate of just 49%, with 21 losing months versus 20 winning ones. The index has delivered an average gain of only 0.55% during February, making it the second-worst month of the year, trailing only September’s average decline of 0.67%.
The weakness tends to emerge after a powerful winter rally.
Historically, the period from October through January has been one of the strongest stretches for the Nasdaq 100.
Since 1985, the index has averaged gains of 1.76% in October, 2.54% in November — the strongest month of the year — 1.68% in December and 2.50% in January, the second-best monthly performance.
February has frequently marked the first meaningful pullback after that four-month advance.
| Month | Nasdaq 100 Average Gain (Since 1985) |
Winning Rate |
|---|---|---|
| January | 2.50% | 71% |
| February | 0.55% | 49% |
| March | 0.79% | 66% |
| April | 1.46% | 59% |
| May | 2.23% | 68% |
| June | 0.84% | 54% |
| July | 1.70% | 68% |
| August | 0.41% | 59% |
| September | -0.67% | 54% |
| October | 1.76% | 63% |
| November | 2.54% | 68% |
| December | 1.68% | 54% |
February Seasonality Has Worsened In Recent Decades
The February effect has become even more pronounced in the modern era.
Since 2000, the Invesco QQQ Trust (NASDAQ:QQQ) – the world’s biggest fund tracking the Nasdaq 100 – has averaged a 0.38% decline in February, making it the second-worst month of the year after September’s steep 1.91% average loss.
More notably, February has posted the lowest winning rate of any month at just 42%, even weaker than September’s 48%.
By contrast, other months continue to show more favorable seasonality.
July, October and November have all delivered strong average gains alongside winning rates well above 60%, reinforcing the idea that February stands out as a statistical outlier for tech performance.
| Month | QQQ ETF Average Gain (Since 2000) |
Winning Rate |
|---|---|---|
| January | 0.93% | 63% |
| February | -0.38% | 42% |
| March | 0.81% | 65% |
| April | 1.51% | 63% |
| May | 1.16% | 59% |
| June | 0.86% | 59% |
| July | 1.98% | 70% |
| August | 1.01% | 59% |
| September | -1.91% | 48% |
| October | 3.04% | 63% |
| November | 2.61% | 74% |
| December | 0.30% | 52% |
What It Means For Investors
While the current selloff has been driven by renewed concerns around software valuations, hyperscaler spending and earnings sustainability, the timing aligns closely with long-term seasonal trends.
Historically, February has acted less as a turning point and more as a pause within broader bull cycles.
For investors watching the February dip with concern, historical trends offer some reassurance.
February tends to be a temporary lull after four strong months, not the start of a broader collapse.
Seasonality suggests the Nasdaq 100 tends to regain momentum heading into spring, particularly in March and April, with average returns of 0.79% and 1.46% respectively since 1985.
In short, February’s struggles may feel uncomfortable, but for tech stocks, they are anything but unusual.
Photo: FOTOGRIN/Shutterstock
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