Something rare is happening to the Technology Select Sector SPDR Fund (NYSE:XLK).
With one week left in April trading, the tech-sector benchmark has surged 18.6% for the month, putting it on track for its strongest monthly gain since October 2002, when the dot-com bust bottomed out.
The 18.63% surge as of April 22 ranks as the third best-performing month since the fund’s inception in 1999.
Notably, there have been just nine instances since then where the Technology Select Sector SPDR Fund posted a double-digit monthly rally.
Benzinga asked: What has historically followed for tech stocks after a surge of more than 10% in a single month?
What History Shows Happened Next
A Tradingview’s event study looking at the forward returns of the XLK ETF after a >10% month spike
Over the next 30 days, tech has been a coin flip — exactly 50% of the time the sector went up, and the average return was a loss of 1.88%.
Over three months, performance slipped further, with the win rate dropping to 37.5%.
Only at the six-month mark does the picture brighten, and at twelve months, seven of the prior eight episodes delivered positive returns, with an average gain of 22.14%, more than double the unconstrained 10.75% average.
| Month | Context | Move % | 1M Fwd | 3M Fwd | 6M Fwd | 12M Fwd |
|---|---|---|---|---|---|---|
| Jan 1999 | Dot-com acceleration phase; Fed on hold; retail speculation surging | +15.90% | -9.92% | -2.64% | +5.83% | +33.72% |
| Jan 2001 | Post-crash bear market rally after Fed’s emergency 50bp intermeeting cut on Jan 3 | +19.12% | -33.51% | -22.76% | -29.71% | -36.35% |
| Oct 2002 | Capitulation bottom of dot-com bust; Nasdaq had lost ~78% from peak | +24.77% | +15.85% | -2.1% | +5.76% | +32.93% |
| Mar 2009 | Global Financial Crisis bottom; S&P 500 at 12-year lows before a 70% rally | +10.62% | +13.00% | +26.12% | +31.95% | +49.74% |
| Oct 2011 | European sovereign debt deal relief rally after S&P 500 nearly entered bear market | +10.21% | -2.15% | +3.92% | +7.38% | +12.00% |
| Oct 2015 | Recovery from August-September China devaluation shock; Apple-led Nasdaq bounce | +10.51% | +0.71% | -5.52% | -3.48% | +8.64% |
| Apr 2020 | Covid crash bottom plus six weeks of unprecedented Fed and fiscal stimulus | +13.74% | +7.18% | +20.81% | +21.28% | +52.83% |
| Jul 2022 | Peak inflation bounce on hopes of slower Fed tightening; bear-market rally that later failed | +13.45% | -6.21% | -11.34% | -5.73% | +23.67% |
| Apr 2026 | Current: Strait of Hormuz closure recovery after U.S.-Iran conflict began Feb 27 | +18.61% | — | — | — | — |
Two observations jump off the page.
First, the near-term path following these big up-months is genuinely ugly.
Five of the eight prior episodes delivered negative one-month forward returns. January 2001 delivered a one-year loss of 36.35% because the bottom had not yet arrived.
October 2015 gave back all of its initial bounce over the next three months. July 2022 looked like the all-clear for tech, and it was not — the sector fell another 11% over the following quarter before the AI boom finally turned the tape.
Second, the twelve-month picture is as close to a durable pattern as event studies tend to offer.
Excluding the January 2001 episode — where the crash was still in its first act — the seven remaining forward-year returns average above 30%.
| Statistic | 1M Fwd | 3M Fwd | 6M Fwd | 12M Fwd |
|---|---|---|---|---|
| Average | -1.88% | +0.81% | +4.16% | +22.14% |
| Median | -0.72% | -2.37% | +5.79% | +28.30% |
| Win Rate | 50.0% | 37.5% | 62.5% | 87.5% |
| Max Drawdown | -24.91% | -33.51% | -33.51% | -48.39% |
| Benchmark Avg (uncnstr.) | +0.74% | +2.42% | +5.24% | +10.75% |
So, Buy Or Sell?
The data does not give a clean answer — which is itself the answer.
Buying a big tech up-month since 1999 has been a losing bet over one month, a flip of the coin over three, and a clear winner over twelve.
The asymmetry is real, but it rewards patience and punishes the investor who confuses the first leg of a rally for the whole thing.
October 2002 is the ghost in the headline. What rarely gets mentioned is that the month that made the best XLK return ever was followed by a quarter that gave some of it back.
And that the investors who got rich from the rally were the ones who did not flinch when it did.
The question now is not whether tech is rallying like it was in 2002. It clearly is.
The question is whether the market, after one of the fastest recoveries on record, has earned the right to treat the April bounce as a bottom — or whether the bottom is still somewhere ahead, hidden inside the next headline out of the Strait.
Photo: Shutterstock
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