Archive · 31 Aug 2026
Wall Street’s Momentum Trade Suffers Historic Quarterly Underperformance
A momentum trade means buying stocks that have been doing especially well.
A momentum index tracks some of those stocks in the S&P 500.
Since July 1, that index has lost more than 9 percent.
During the same period, the S&P 500 rose 2.8 percent.
This means momentum stocks performed much worse than the broader market.
The index may have its worst quarterly performance compared with the broader market in 25 years.
Bank of America says July was the second-worst month for this strategy in about 40 years.
The only worse month was April 2009, during the global financial crisis.
The momentum index has fallen more than 9% since July 1.
The S&P 500 has gained 2.8% over the same period.
The index is tracking its largest quarterly underperformance in 25 years.
Bank of America estimates July was the momentum trade’s second-worst month in about 40 years.
April 2009, during the global financial crisis, was the only weaker month identified.
- Who
- The momentum index and the stocks it tracks, compared with the S&P 500.
- What
- The momentum trade has sharply underperformed, with its index falling more than 9% since July 1.
- When
- Since July 1; July was identified as the second-worst month in about 40 years.
- Where
- Wall Street and the broader U.S. stock market.
- Why
- The articles do not specify why the momentum trade declined.
- Momentum index performance
- Down more than 9% since July 1.
- S&P 500 performance
- Up 2.8% since July 1.
- Projected record
- The index is on track for its largest quarterly underperformance in 25 years.
- July ranking
- July was the second-worst month for the momentum trade in about 40 years, according to Bank of America estimates.
- Worst month identified
- April 2009 was the only month cited as worse than July.
- Historical context
- April 2009 occurred during the global financial crisis.