U.S. Stocks Endure a Rare Monday Slump

The S&P 500 SPX experienced a rare decline on Monday, breaking a four-month streak of positive Monday performances. Despite the strength of mega-cap technology stocks and a decrease in Treasury yields, the large-cap index suffered its fifth consecutive daily loss, marking the longest losing streak since December, as reported by Dow Jones Market Data.

A Historic Streak Comes to an End

Monday's session not only extended the stock market's worst stretch this year but also ended an extraordinary run of success. For the first time since 1928, the S&P 500 started the week with a loss following 15 consecutive Mondays in the green. This remarkable streak of "green Mondays" surpasses even the 11-day stretch in June 2005 and the 10-day stretch in July 2020, according to data analyzed by Ryan Detrick, chief market strategist at Carson Group. Worth noting is that FactSet's data represents the index's performance prior to its formal creation in 1957.

Disappointing Close Ends Hopes for a New Record

Although it appeared close until the end, the S&P 500 slipped into negative territory in the final 20 minutes of trading. This dashed hopes for a potential 16th straight week of positive Monday returns, which had attracted attention from equity analysts, including a team at Bespoke Investment Group. The team had recognized the significant role that Mondays played in driving this year's overall gains.

In conclusion, U.S. stocks encountered an unusual downward trend on Monday, breaking its exceptional streak of positive Monday performances. Despite various factors, the S&P 500 experienced a consecutive loss for the fifth day in a row, marking its longest losing streak since December. This development has kept market analysts intrigued and highlights Mondays' importance as key drivers of market performance throughout the year.

Magnificent Mondays: A Significant Contributor to Market Gains

In a year where unprecedented anomalies have become the norm, Mondays have proven themselves to be an unexpected driving force behind market success. The significance of this phenomenon is exemplified by the fact that, without Mondays, the S&P 500's year-to-date gain of 10.02% would have been reduced to a fractional decrease. This insight was shared by the Bespoke team in a recent note.

Usually, U.S. stocks do not outperform consistently on Mondays. In fact, the opposite tends to be true. However, this year has defied historical trends and witnessed an astonishingly long winning streak.

"To sum up how odd this year has been, historically Monday is the worst day of the week. But in 2023 we go and have the longest win streak in history," Detrick noted.

Despite this, on Monday, the Dow Jones Industrial Average (DJIA) experienced a dip, shedding nearly 191 points or 0.6%, closing at 32,936.41. On the other hand, the Nasdaq Composite (COMP) managed to secure a solid gain of almost 35 points or 0.3%, reaching 13,018.33. Meanwhile, the S&P 500 recorded a decrease of 7.12 points or 0.2%, closing at 4,217.04. It is worth noting that the S&P 500 has now finished below its 200-day moving average for two consecutive sessions, marking the longest streak of its kind since March.

See: S&P 500 breaks below key level for first time since March as stocks erase summer gains