July has been good to U.S. equity bulls for 11 years, can it hit 12?

JULY HAS BEEN GOOD TO U.S. EQUITY BULLS FOR 11 YEARS, CAN IT HIT 12?

July has been kind to U.S. stock investors for more than a decade, and Wall Street analysts say this year's setup, marked by lower oil prices and strong seasonal factors, could make for another run-up.

The S&P 500 CBOE:SPX has posted a July gain for 11 successive years and the index has posted an average July gain of 1.5% since the start of the century, making it the third-best-performing month of the calendar year.

"The market is shaping up for a positive performance in July. Positive seasonality, ample cash (still) in the system, less need for central banks to hike rates with oil prices lower and not so crowded positioning all argue for a positive performance for risky assets in July," Jefferies analysts said in a note.

If looked at more closely, July historically has been the best-performing month in the third quarter for both the S&P 500 and the Dow DJ:DJI, as per the Stock Trader's Almanac.

Going even more granular, the first half of July has the strongest seasonality for the S&P 500 out of any period since 1929, according to Wells Fargo analysts.

Wells Fargo is bullish and expects a summer rally before the U.S. midterm-election-led volatility in September.

However bullish the setup, some analysts warned that a weakening of U.S. technology stocks, escalating geopolitical situations and concerns around the AI trade could be some of the things that pose a risk.

Things were not off to a strong start, with Wall Street's main indexes mixed on Wednesday as fresh U.S.-Iran tensions cast doubt on peace in the Middle East and chipmakers including Nvidia NASDAQ:NVDA leading losses.