Is October Bad for Stocks?

The short answer: Not as bad as its reputation. Stocks often struggle in the first three weeks of October, which is why Carson Group's Ryan Detrick says "October phobia is real." But the low has often come late in the month, and Carson's data shows October 28 has been the S&P 500's best day of the year, with an average gain of 0.50%. With hedge funds heavily short and sentiment gloomy, Detrick expects a rally into year-end.

Drawing on The Pomp Podcast, hosted by Anthony Pompliano (anthonypompliano.com), with Ryan Detrick, Chief Market Strategist at Carson Group (episode released October 27, 2026).

October has a reputation as the month that scares investors, and 2026 has been no exception. Hedge funds just had one of their worst days in 15 years, short positions are near a five-year high and the Federal Reserve announces its latest decision on October 28. On The Pomp Podcast on October 27, Ryan Detrick, Chief Market Strategist at Carson Group, made the case that this kind of fear is normal for October, and that history says the back half of the month is when things tend to turn. This piece lays out what he said, what the data shows and what could go wrong. Market data is as of October 27, 2026, before the Fed decision.

Because it often starts badly. "October phobia is real. You know, it's a spooky season," Detrick told Pomp. He said it is normal to see weakness in roughly the first three weeks of the month. In a note published the same day, he wrote that "the third week of October can be rough, and it was this year, but stocks tend to form a major low right about now."

His summary on the show was simple: "But you get this major low late October and then you rally."

By Carson's numbers, yes. In the October 27 note, Detrick wrote that October 28 "is also the best day of the year for the S&P 500, with an average gain of 0.50%." It is also his birthday, which he joked about on the show.

Other datasets put it near the top too. The Market Calendar ranks October 28 as the second-strongest calendar day for the S&P 500 since 1957, with an average gain of 0.532% and gains in 70% of years, behind only December 26.

Detrick was clear that one day is not a strategy. "In no way, shape, or form do we ever suggest investing purely based on one day," he wrote. "In fact, that isn't investing, and we'd argue it's more like gambling."

It adds risk. Detrick noted in his note that under Fed Chair Kevin Warsh, the S&P 500 fell on all three Fed decision days so far: 1.21% in June, 1.52% in July and 0.45% in September. "When Warsh talks, the market hasn't liked it, but tomorrow is usually a good day," he wrote.

On the show, he said he expects a Fed that is less hawkish than markets are pricing: "the reality is I think one more hike and that's probably it." For the full rate outlook, see Will the Fed Raise Rates in December?

Because so many investors are bearish. He pointed to several signs of extreme fear, all cited in his October 27 note:

When the crowd is positioned for a drop, Detrick argues, the most painful move is up. "Market likes to cause max pain," he said. "And right now, it sure feels like a lot of people are expecting lower bad things to happen. And I like to take the contrarian to that signal."

Historically, well, and especially in midterm years like this one. Detrick wrote that "the seasonally bullish November and December" are ahead, and he told Pomp that October and November have historically been the two strongest months of a midterm year. Opening Bell Daily found that the S&P 500 has averaged a 6.6% gain in the fourth quarter of midterm years since 1950, finishing higher in 16 of 19. For more on the election, see How Does the Stock Market Do After Midterm Elections?

He closed the episode by predicting "a fourth quarter surge for all the reasons we just laid out."

Tech. "As we've been saying for a while now, it's all about tech right now," Detrick wrote, adding that strong results from the big hyperscalers "could go a long way to sparking the rally." On the show he named the bears' best argument: rising credit default swap spreads on some hyperscalers and AI cloud companies, and record AI spending. "If tech blows up, listen, my bullish thesis probably isn't going to play out," he said. Microsoft and Alphabet report after the close on October 28 and Amazon on October 29. For the bear case in full, see Is the AI Spending Boom a Bubble?

October's bad reputation comes from real early-month weakness, but the data Detrick cites says the month has often ended on a stronger note, and October 28 has been one of the best days of the year. The bullish case rests on sentiment: when hedge funds are this short and investors are this defensive, it doesn't take much good news to push stocks higher. None of that guarantees a rally, especially with a Fed decision and Big Tech earnings landing the same week. Seasonal patterns describe the past and can stop working.

October has a reputation for weakness, and stocks often struggle in the first three weeks of the month. But Carson Group's Ryan Detrick says a major low tends to form late in October, followed by a rally.

According to Carson Group, October 28 has been the best day of the year for the S&P 500, with an average gain of 0.50%. The Market Calendar, using data since 1957, ranks October 28 second behind December 26.

Ryan Detrick says no one should invest based on one day. He wrote that doing so "isn't investing" and is "more like gambling." The seasonal pattern is one input, not a strategy.

He points to extreme pessimism: hedge fund shorts near a five-year high, heavy selling, a surge into cash and historically strong seasonality in November and December of midterm years.

Opening Bell Daily found the S&P 500 has averaged a 6.6% gain in the fourth quarter of midterm years since 1950, finishing higher in 16 of 19.

The Pomp Podcast is hosted by Anthony Pompliano and covers the future of business, finance and technology. The show features Pomp's conversations with founders, investors and economists about bitcoin, markets, AI and the economy. Follow The Pomp Podcast on X.

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This article reflects the opinions of the guests and host as shared on The Pomp Podcast. It is guest opinion, not investment advice. Do your own research before making any investment decision.