S&P 500 posts strongest buying move since November 2020

The US stock market is showing a notable move on 5 August 2026. Investors are buying American stocks on a scale not seen since November 2020, with a deviation of no less than 3.9 standard deviations on an annual basis. The strong start to August puts an end to a streak that lasted nearly two and a half years.

In brief:

• Net buying in US stocks reaches its highest level since November 2020, largely driven by short covering.
• The S&P 500 rises more than 1% on the first trading day of August, ending a 29-month streak without such an opening gain.
• Buying pressure is most visible in equities and macro products, while sectors such as healthcare and utilities are experiencing selling pressure.

Short covering drives the buying wave

According to analyst TheBirbNest on X, the sharp buying movement in US stocks is largely attributable to short covering. This means that investors who had previously bet on a price decline are now closing their positions by buying shares after all. This creates mechanical but powerful upward pressure on prices.

The figures from the Prime Book show that cumulative net buying over a five-day period comes in at 3.9 standard deviations above the annual average. Measured over twenty trading days, that deviation stands at 3.2 standard deviations. Sectors such as consumer goods and information technology show the strongest inflows, while utilities and healthcare are facing selling pressure.

End of an exceptionally long streak

The breakthrough on the first trading day of August is also historically remarkable. The S&P 500 had gone 29 consecutive months without posting a gain of 1% or more on the first trading day of the month. That is one of the longest periods without such an opening gain in the history of the index, which dates back to 1953.

The chart shows that similar dry spells have occurred before, but that the current streak was nearly as long as the record run of 44 months that ended in March 1996. The breakthrough of August 2026 therefore draws attention as a statistical outlier that is noticeably influencing sentiment in the stock market.