Why Wall Street isn’t buying it this year

It’s the seasonal adage investors love to debate: “Sell in May, go away.”

But in a market currently driven by policy headlines, many strategists say this year’s climate doesn’t fit the usual patterns. With lingering economic uncertainty, fragile technicals, and geopolitical catalysts like US-China trade talks in play, few see a clear case for stepping to the sidelines — at least not just because the calendar says so.

“We’re in a different market this year,” Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report, told Yahoo Finance last week. “Historically, if we go back over the past ten years, sell in May hasn’t actually worked too well.”

The saying traces its roots overseas to when London traders timed their market exits in the summer before buying again just after the famous Saint Leger horse race in September. The idea was to skip the typically sluggish summer months and reenter when markets historically perform better.

This approach proved effective during the early days of modern Wall Street between 1960 and 1987.

But things shifted after the major market crash of 1987. Following that, a fully invested strategy began to outperform, and staying invested through the summer months became more favorable. Since then, holding steady during this period has generally been a winning strategy, at least on balance.

According to data compiled by LPL Financial, the S&P 500 (^GSPC) has historically posted its weakest average returns between May and October — just 1.8% since 1950 — compared to the stronger November-to-April period.

While summer returns have been positive 65% of the time, their relative underperformance has reinforced the “sell in May” trend as seasonal market behavior. However, not everyone is convinced the pattern holds in today’s volatile market.

“Seasonality data can provide important insights into the potential market climate, but it doesn’t represent the current weather,” Adam Turnquist, chief technical strategist at LPL Financial, wrote in a note to clients on Wednesday. “And when it comes to markets, tariff uncertainty and monetary policy right now have the power to make it rain or part clouds into sunshine.”

From a technical standpoint, stocks showed significant progress in April but remained in recovery mode after all three major indexes posted their worst monthly performances of the year.

“This is a very high volatility news driven cycle,” Tentarelli added. “I’m looking to buy the pullbacks as opposed to sell the rallies.”