S&P 500 Enters Historically Strong Period Despite Inflation Pressure

The S&P 500 began its strongest seasonal trading window on Wednesday. Data going back to 1950 shows the index has risen from mid-October through the end of the year in eight out of every ten years.

Yet hotter-than-expected US inflation is challenging that track record right from the start. The benchmark slipped 0.75% after recently touching all-time highs.

Why Mid-October Signals a Turning Point for Equities

Charles Edwards, founder of Capriole Investments and a member of BeInCrypto's Market Intelligence Expert Council, highlighted the date on Wednesday.

“Today is the start of the best 60 days of the year for stocks.”

BeInCrypto's own analysis of daily closing prices supports that observation. From the Oct. 13 close to year-end, the S&P 500 posted gains in 61 of the past 76 years.

The median return during that span was 4.2%. By comparison, a randomly selected period of the same length delivered roughly 2% and was positive only 66% of the time.

Kyle Doops, host of Crypto Banter and another Council member, drew a comparison between 2026 and the 30-year average. That average declines into mid-October before rising through December.

The S&P500 usually shows increased strength into end of year when comparing with the last 30 years.

Can a Solid 2026 Keep the Year-End Streak Alive?

Historical data favors years that are already strong. When the index entered the seasonal window with a gain of 10% to 20%, it finished higher in 21 out of 25 instances.

Gains also tend to concentrate in one month. November rose in 13 of the last 14 years, while December averaged just 0.10%, according to data from Forecaster.biz.

Meanwhile, the risks are tangible. September inflation data showed prices climbing 3.7% year-on-year, above expectations, with gasoline surging 9.1% in a single month, the Bureau of Labor Statistics reported.

The Federal Reserve raised rates in September, and another increase before year-end is under consideration. In 2018, a midterm election year that also featured Fed tightening, the seasonal window lost 9.4%.

Nevertheless, a four-year-old bull market and projected third-quarter earnings growth of 29.2%, according to FactSet, give the seasonal pattern a fundamental underpinning. Whether corporate profits can outpace 5% Treasury yields will likely determine which side of the 80% historical probability this year falls on.