BankToons · Video
Is October Bad for Stocks? What History Says About 2026
Is October bad for stocks? It has a scary reputation on Wall Street: the crashes of 1929, 1987 and 2008 all happened in it. We look at what the numbers actually show, and why a midterm election year like 2026 looks different.
The short version: since 1950 the S&P 500 has averaged a small gain in October. In midterm election years it averaged about 3.3%, the best month of those years. Thirteen bear markets have ended in October, and from its October low the S&P 500 finished the year higher in about 93% of years.
Our take: if you invest for the long run, do not sell just because it is October. Expect a bumpy first week, and watch the forces that move prices, not the calendar. This video is for education, not personal financial advice.
Full transcript
0:00 Is October a bad month for stocks?
October has a scary reputation on Wall Street. Some of the worst stock market crashes in history happened in October. But the long-run numbers look much calmer. And in a midterm election year like twenty twenty six, they look surprising. First, here is where the fear comes from. Then we will walk through what the numbers actually show.
0:20 Why investors fear an October stock market crash (1929, 1987, 2008)
The fear even has a name. People call it October phobia. And it has real history behind it. The great crash of nineteen twenty nine was one of them. Black Monday, in nineteen eighty seven, was another. The Dow Jones Industrial Average tracks thirty of the biggest companies in the country. On October nineteenth that year, it fell twenty two point six percent in a single day. The S&P five hundred is five hundred of the biggest American companies. It lost about twenty one point eight percent over that one October. Then came October two thousand eight, during the global financial crisis. In the week ending October tenth, the Dow lost about eighteen point two percent. Those are the Octobers people remember. But they are the extremes, not the average.
1:07 Stocks in October: how the S&P 500 does on average
Zoom out, and October looks very different. Go back to nineteen fifty. On average, the S&P five hundred has gained a little under one percent in October. So October has not been a losing month.
1:19 Where October ranks in recent years
Recent years look even better. Take the twenty one years from two thousand four to twenty twenty four. In that stretch, October ranked fifth of the twelve months. An index is a basket of stocks tracked as one number. Across the major indexes, the average October gain ran from about zero point three percent to one point one percent.
1:40 Why October feels so volatile
So why does October still feel dangerous? The answer is volatility. Volatility means prices swinging up and down fast. October can be a rough ride, even when it ends about flat.
1:52 Why the first week of October is choppy
The start of the month has often been the choppy part. Stocks have tended to stay weak through about the seventh or eighth trading day. Then they have tended to improve through the middle and the end of the month. That is a pattern from the past, not a forecast.
2:07 The midterm year stock market in October
Now the part that matters for twenty twenty six. This is a midterm election year. The midterms are the elections held halfway through a president's four year term. Each year of that term has its own October record. These numbers use data from nineteen fifty through twenty seventeen. In the year after a presidential election, the S&P five hundred averaged about one percent in October. In the year before one, about zero point one percent. In the presidential election year itself, it lost about zero point seven percent. And in midterm years, it gained about three point three percent. In midterm years, no other month did better in that data.
2:45 Dow, Nasdaq and Russell 2000 in midterm Octobers
It was not only the S&P five hundred. In midterm year Octobers, the Dow averaged about three point one percent. The Nasdaq, which leans toward technology companies, averaged about four point two. The Russell two thousand, a basket of two thousand smaller companies, averaged about three point nine. None of that promises a gain this October. It is a pattern, not a guarantee.
3:10 Why October is called a bear killer
October has one more side. It is often the month when a falling market turns around. A bear market is a drop of twenty percent or more from the top. The Stock Trader's Almanac is a yearly guide that tracks these patterns. It calls October a bear killer. By its count through twenty twenty two, thirteen bear markets since World War Two ended in October. Several of those turns came in midterm years. So the month known for crashes has also been one of the most common months for a slide to end.
3:40 What happens after the October low
October also leads into a strong stretch. November and December have usually been good months for stocks. And October closes what the almanac calls the worst six months of the year. Look at the S&P five hundred since nineteen fifty seven. From its October low to the end of December, it rose in about ninety three percent of years. The average gain over that stretch was about seven point four percent. One caution. That is measured from the lowest point in October, not from October first. And nobody knows where the low is until the month is over.
4:14 What could outweigh the October pattern
So what does this mean for twenty twenty six? It does not mean October is sure to go up. The calendar is not the biggest force on the market. Interest rates, bond yields, inflation, oil prices, company profits and the election itself can all outweigh a seasonal pattern. What the history does show is where October's bad name comes from. It was built by a handful of famous crashes. The full record is calmer than the reputation.
4:41 So, is October bad for stocks?
So, is October bad for stocks? Not by the numbers. Since nineteen fifty, it has averaged a small gain. In midterm years, it has averaged about three point three percent, the best month of those years. Thirteen bear markets have ended in October. And from its October low, the S&P five hundred finished the year higher about ninety three percent of the time.
5:03 Our take for investors this October
Here is our take. If you invest for the long run, do not sell just because it is October. Expect the first week or so to be bumpy, because it often is. Then watch the forces that move prices, not the calendar. October earned its scary name in a few bad days. It has spent seventy years mostly proving that name wrong. So this October, judge it by its record, not its reputation.