Market information and commentary are current as of October 21, 2026.
Well, here we are, just two weeks away from the midterm elections, and October is certainly living up to its reputation for keeping investors on their toes!
I always find election time interesting because the story almost always feels like the same movie reel: there’s uncertainty, there’s angst. And when it’s finally over, there’s a collective sigh of relief, the markets can pick up right where they left off. At least, that’s how I hope the markets will behave soon after, regardless of the outcome.
But before we talk about October, remember those “September Blues” I talked about last month?
Well, September actually lived up to its reputation this year. The headline stock indexes—led by the mega-giants—masked much of the pain, finishing the month only slightly lower, but many smaller companies took a much bigger hit.
Remember my analogy about the soldiers and generals? Earlier this summer, I talked about how encouraging it was to see more stocks participating in the market’s climb. Well, lately, some of those soldiers have been retreating while the generals—those larger companies—have been doing much of the heavy lifting.
And now that we’re into football season, I’d like to switch up my analogies: Think of it like a football team that’s still winning, but you’re beginning to notice that not everyone on the field is playing particularly well (I won’t comment on the Bears after they played my Packers 😊). You still have hope that they’ll win, but you’re on the edge of your seat watching how it unfolds. Similarly, we certainly want to pay close attention to what’s happening under the surface of the stock market right now.
And that’s pretty much what’s been happening in October. The major stock indexes have held up reasonably well, but many individual stocks have struggled, leaving investors in a bit of a “wait-and-see” mode, at least until after the election.
Meanwhile, remember how I mentioned last month that the Fed pressed down on the brakes by raising interest rates? Well, inflation is still running higher than they’d like, reaching 3.7% in the latest report. So there’s already talk of another rate increase before the year is over. Most economists expect the Fed to hold steady at its meeting later this month, but another increase in December is widely expected.
And then, of course, we have the midterm elections on November 3rd. As I’ve mentioned before, midterm election years have historically brought more uncertainty and ups and downs to the markets. But once the voting is over and that big question is answered, markets have often performed better. Of course, as I mentioned last month, these are tendencies, not guarantees.
This confusing environment is exactly why we use tactical managers. Instead of trying to guess what the government or the headlines will do next, our managers let real data guide their decisions and adjust when conditions change.
At least for now, the longer-term market trend remains positive, despite a few warning signs. So, we’ll let the managers manage and continue to take this market one day at a time.
