These Stocks Beat the June Slump Every Year

We’re just two days away from flipping the calendar to June, and that means one thing for savvy investors, the seasonal headwinds are about to change.

Despite the volatility and tantrums, May has been relatively good for stocks as the Nasdaq 100 is closing in on gains of 2.5% for the month.  The S&P 500 is right behind netting 2% and the Russell 2000 Index has stretched its winning month out to almost 3%.  That last point on the Russell is important to investors as it is a sign that investors are taking more risks, despite the market’s clouds.

READ ABOUT WHY SPECULATIVE INVESTING IS CRITICAL FOR THE MARKET HERE

The performance is slightly better than the 20-year average for the S&P 500 as investors stormed back into the market following the White House’s tariff pause.  We’ve seen signs that there is progress in the trade negotiations, but no fruitful evidence that we’re done wringing our hands over the matter until early July.

Now the Trade Winds Shift

Historically, June is the third worst month of the year for the S&P 500, trailing only September and February in terms of average performance. That means when investors talk about the "Sell in May" strategy, what they really mean is this: you want to be out before June 1.

This year, the warning signs are flashing even brighter than usual. Sentiment has flipped from fear to greed in record time. Economic data is deteriorating under the surface. And geopolitics, rate path uncertainty, and election-year volatility are throwing in an extra layer of unpredictability.

So, should investors run for the hills this June? Not necessarily.

While June has earned its reputation for weakness, there are always pockets of strength in the market, you just need to find them. I’ve dug through 20 years of data to identify the sectors and individual Nasdaq-100 stocks that have historically held up the best (and worst) in June.

Let’s start with the sector breakdown.

The Three Best and Worst Performing Sectors in June

Over the past 20 years, a clear pattern has emerged: defensive sectors tend to outperform in June.  This happens as  cyclical and financial sectors tend to drag.

Top 3 Performing Sectors:

1. Health Care (XLV):
   Averaging a +0.9% gain in June over the past two decades, Health Care leads the pack. It’s also positive in 60% of those years. This makes it a reliable anchor during turbulent early summer conditions. Investors often shift toward defensive names like big pharma and medical device companies when uncertainty rises.
2. Communication Services (XLC):
   While this ETF is newer (data from 2018 onward), it has posted gains in 65% of Junes, making it the most consistently green sector in the summer kickoff. Names like Alphabet and Meta help carry the weight.
3. Technology (XLK):
   Tech isn’t immune to volatility, but it still manages to post a respectable +0.7% average return in June, with a 50/50 shot at being positive. While not dominant, the sector tends to benefit when investors are chasing growth even in choppy conditions.

Keep in mind that investors have been wary of the technology names as we’ve seen the Nasdaq 100 and SPDR Technology Sector ETF (XLK) trade with roughly 30% more volatility that the S&P 500.  If there is a washout in stocks the tech sector will be the first to show signs.

Bottom 3 Performing Sectors in June

1. Financials (XLF):
   This one’s consistently bad. With a –1.2% average return and only 35% of Junes finishing in the green, the Financials sector is a clear laggard. Rising rate fear, credit risk, and recession concerns typically hit the big banks and insurers hardest.
2. Materials (XLB):
   Materials stocks have averaged a –0.8% drop in June, with only 42% of Junes ending positive. This reflects the cyclical nature of commodity-related names during periods of growth uncertainty.  The materials sector is heavily tied to investors’ expectations for the economy.  As a result, the last month has seen a rally in XLB shares as economists have backed off of their forecasts that the economy is set to slump into a recession. From a long-term perspective, the materials ETF is trading in an official bear market trend that started in March.
3. Industrials (XLI):
   Another classic cyclical sector that tends to get sold in June. With a –0.7% average return and a similar 42% win rate, it’s a sector to approach with caution this time of year.

Best and Worst Performing Nasdaq-100 Stocks in June

Sector performance tells part of the story, but individual stock behavior reveals even more. I’ve run a 20-year backtest on the current Nasdaq-100 constituents and found the following 10 names that shine (or sink) in June.

Top 5 Nasdaq-100 Stocks in June:

1. Biogen (BIIB):
   +1.9% average return. While this stat is skewed by a monster move in 2021 (+38%), the stock still holds a positive edge.
2. Tesla (TSLA):
   +1.5% average return. Volatile, yes, but capable of big upside bursts in summer months. The coin flip odds (50% win rate) reflect the risk-reward setup.
3. NVIDIA (NVDA):
   +1.3% average return, with a 55% win rate. The AI leader continues to attract risk-on flows even when the rest of the market cools.
4. O’Reilly Automotive (ORLY):
   +1.2% average and the most consistent with a 70% win rate. This stock is a quiet compounder and June is its season to shine.
5. Monster Beverage (MNST):
   +1.0% average and 65% win rate. The consumer staple with a growth twist tends to hold up well even during broader selloffs.

Bottom 5 Nasdaq-100 Stocks in June:

1. PayPal (PYPL):
   –0.4% average return with only 40% of Junes in the green. The stock’s recent struggles seem to mirror its long-term seasonal weakness.
2. Micron Technology (MU):
   –0.4% average, 40% win rate. Memory chip pricing pressure and global demand cycles make this a poor summer performer.
3. Walmart (WMT):
   –0.4% average, 42% win rate. Surprisingly weak for a defensive name. Could reflect post-earnings fatigue or summer retail softness.
4. Advanced Micro Devices (AMD):
   –0.3% average return, just 40% positive Junes. Like Tesla, it’s a high-beta name, but June hasn’t been kind to AMD over time.
5. Qualcomm (QCOM):
   –0.3% average return, 45% win rate. Seasonal slowdowns in handset demand may play a role here.

Bottom Line

As a general rule, June is not the month to get aggressive in the market, History tells us that clearly. But it’s not a one-size-fits-all selloff either. This is one of the few months of the year when a sector/stock rotation can benefit nimble investors. The right strategy is to rotate smartly, lean on sectors with historical resilience, and watch for individual opportunities that consistently defy the broader trend.

Investors that aren’t as keyed-in to the markets to track the potential volatility are likely to benefit from simply holding through the month as July’s seasonality turns bullish for one last push before the worst three months of the year… August through October.