Reality Check
July 31, 2026

A 6-Point Gap That Usually Shows Up in a Falling Market

July 2026 produced one with the S&P 1.6% from its all-time high. The only close matches are five months from 2000.

July closed with the S&P 500 down just 0.13% and the Nasdaq 100 down 6.57%. That is a 6.45-point gap in the S&P’s favor. Gaps this wide are rare. Since QQQ began trading in March 1999, it has happened in only 15 of 328 months, or roughly once every 22 months.

The gap normally occurs in a broken market

Most of those 15 months occurred in already broken markets. Only 6 of the 15 gaps occurred while the S&P was still within 10% of its own all-time high. Last month is the shallowest of them at 1.6% from the high. No prior month has produced a gap this large with the S&P this close to ATHs.

SPX distance from All-Time HighsAll 15 months since March 1999 in which SPX beat QQQ by 6 points.0%-10%-20%-30%-40%10% below the ATHMar 2000−1.9%Apr 2000−4.9%May 2000−7.0%Sep 2000−6.0%Oct 2000−6.4%Nov 2000−13.9%Dec 2000−13.6%Feb 2001−18.8%Mar 2001−24.0%Jul 2001−20.7%Sep 2001−31.9%Feb 2002−27.5%Dec 2002−42.4%Sep 2008−25.5%Jul 2026−1.6%SPX close against its own all-time-high closeJuly 2026Within 10% of the ATH (5 others)More than 10% below (9)
All 15 months SPX beat QQQ by 6 points
MonthSPXQQQGapSPX vs ATH+6 Months+12 MonthsWorst Drawdown
Mar 2000+9.7%+2.6%+7.1−1.9%−4.1%−23.5%−25.4%
Apr 2000−3.1%−13.5%+10.4−4.9%−6.1%−14.0%−24.0%
May 2000−2.2%−12.3%+10.1−7.0%−5.9%−11.6%−22.3%
Sep 2000−5.3%−12.7%+7.3−6.0%−20.2%−25.4%−32.8%
Oct 2000−0.5%−7.9%+7.4−6.4%−12.7%−21.7%−32.4%
Nov 2000−8.0%−22.9%+14.9−13.9%−3.6%−11.2%−26.6%
Dec 2000+0.4%−7.3%+7.7−13.6%−6.3%−11.8%−26.8%
Feb 2001−9.2%−26.2%+17.0−18.8%−6.3%−6.2%−22.1%
Mar 2001−6.4%−17.5%+11.1−24.0%−7.8%−3.0%−16.8%
Jul 2001−1.1%−8.6%+7.5−20.7%−10.0%−29.0%−34.1%
Sep 2001−8.2%−20.9%+12.7−31.9%+9.2%−21.7%−23.4%
Feb 2002−2.1%−12.3%+10.2−27.5%−17.1%−24.0%−29.8%
Dec 2002−6.0%−12.1%+6.1−42.4%+12.9%+26.4%−9.0%
Sep 2008−9.1%−15.6%+6.6−25.5%−30.5%−9.4%−42.0%
Jul 2026−0.1%−6.6%+6.4−1.6%———

The five closest matches all occurred in 2000

Set aside the cases where SPX was already in correction territory and you are left with only five previous instances. All five occurred in 2000. In every one of them the S&P closed lower both six and twelve months later, with a median twelve-month loss of 21.7%. By comparison, a normal month returns roughly +10.9% over the same period and ends higher 75% of the time.

What the S&P 500 did nextThe 5 months since 1999 when SPX beat QQQ by 6 points while sitting within 10% of its own all-time high.All five occurred in 2000.-24%-18%-12%-6%0%+6%+12%Median return-2.6%+1.2%1 month later-2.9%+2.9%3 months later-6.1%+5.2%6 months later-21.7%+10.9%12 months laterAfter the fiveAny month (baseline)

A 6-point monthly gap between the S&P 500 and the Nasdaq 100 is rare. It usually occurs when the market is already well into a decline. July 2026 produced one with the S&P only 1.6% from its all-time high. The only comparable cases are five months from 2000, and the S&P was lower a year later in every one of them by a median of 21.7%.

Five months from one year cannot carry a forecast. What they can show is that this condition has no precedent. Once again the markets are doing things it’s never done before.

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