Wall Street's hot streak is running into a midterm-year curse: Chart of the Day

Wall Street's hot streak is running into a midterm-year curse: Chart of the Day Jared Blikre Wed, August 19, 2026 at 2:11 PM GMT+2 3 min read ^GSPC This year's rally is no longer just a megacap story. Now the calendar is pushing back. The S&P 500 Equal-Weighted Index ( ^SP500EW ) is up about 15% in 2026, beating the roughly 12% gain for the standard S&P 500 ( ^GSPC ).

That distinction is useful here. The standard S&P 500 gives its biggest companies the most influence, while the equal-weight version gives each stock the same weight. In other words, it is a better look at how the average S&P 500 stock is doing.

The S&P 500 Equal-Weighted Index is up about 15% this year, versus roughly 12% for the S&P 500, showing that the rally extends beyond the biggest stocks. · Yahoo Finance AlphaSpace And lately, the average stock has been doing quite well. The broader rally has helped push some of Wall Street's riskiest trades back to the top .

But BTIG technical strategist Jonathan Krinsky sees a tougher stretch of the calendar arriving right on schedule. "Looking at the average seasonal pattern of midterm election years since 1990, [the S&P 500 Equal-Weighted Index] has peaked on August 18 before a pretty rough stretch into mid-October," Krinsky wrote. Yahoo Finance ran the numbers independently, comparing returns in midterm election years with every other year since 1990.

The result is hard to miss. BTIG/Jonathan Krinksky, CMT, Yahoo Finance From Aug. 18 through Oct.

11, the equal-weight S&P 500, in purple, has averaged a 6% decline during midterm election years. In all other years, in green, its average return over the same stretch has been essentially flat. That does not mean the calendar causes stocks to fall.

Seasonal tendencies can weaken, disappear, or reverse entirely — as the old " sell in May " rule has demonstrated. And clearly, actual performance this year, in white, has diverged sharply from the historical seasonal midterm pattern. But the next stretch is where the history gets harder to ignore.

The weakness from mid-August into October has shown up well beyond equal weight. Yahoo Finance During the same Aug. 18 to Oct.

11 window, midterm election years have produced average losses of roughly 5% for the S&P 500, 7% for the Nasdaq Composite, and 8% for the Russell 2000. In other years, all three have averaged flat-to-positive returns. That history is arriving against an unusually calm backdrop.

Krinsky noted that 2026 has yet to produce a single session when falling stocks accounted for more than 80% of volume in stocks listed on the New York Stock Exchange. The average year sees 21 such days, and in Krinsky's data going back three decades, no year had fewer than five. This year still has zero.

Meanwhile, the Cboe Volatility Index ( ^VIX ) — a gauge of expected S&P 500 volatility over the next 30 days — has been hovering near its lows for the year. In other words, stocks are entering a historically rough window without having seen much broad selling pressure or much demand for protection. Story Continues For Krinsky, that combination argues for a little less swagger as summer winds down.

"In summary, we think this is a very attractive time to pare down risk, or look at hedging broad-based equity exposure as we enter a very difficult part of the calendar, historically speaking. " Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.

com.