Historically, Fourth Quarter Bullishness Begins Around Now

By LaRue Gibson on October 21, 2026

William Shakespeare famously quipped “What Is Past Is Prologue.”  Success in most endeavors, including investment markets, requires an understanding of historical antecedents and learning from their implications for the future. Perhaps you know the phrase “Those who fail to learn from history are destined to repeat it.”  We prefer to apply what has come before to improve the probability of success and reduce the chances of failure. “This time is different” remain the four most dangerous words in investing. Reviewing history, through statistical data, may help improve opportunity while possibly reducing the likelihood of disaster.

The fourth quarter has historically offered a favorable backdrop for U.S. equities—and the pattern has been stronger in midterm election years such as 2026. From 1940 through 2025, the S&P 500 Index rose in 67 of 86 fourth quarters, with an average price gain of 3.87%. In the 21 midterm years, it rose 18 times, averaging 6.61%. The new median comparison reinforces that message: the middle outcome was +7.90% in midterm years versus +4.81% across all years.

Historical tendencies do not guarantee a meaningful rally; however, the data imply a high probability of positive performance worth considering. At the October 19, 2026 close, the S&P 500 Index has climbed 0.51% so far for the fourth quarter of 2026. This incomplete result appears separately in the charts, and we exclude it from all completed quarter statistics.

The average asks, “How large was the gain or loss, on balance?”

Add every quarter’s return and divide by the number of quarters. Large gains and large losses influence this number, so a positive average alone does not tell us how frequently investors experienced gains. This is an arithmetic average for separate quarters, not a compounded investment return.

The median asks, “What was the middle outcome?”

Rank the returns from worst to best and find the midpoint. It is less sensitive to unusually large moves. Here, both medians exceed their averages, showing that the favorable average is not simply a few spectacular gains pulling up an otherwise weak middle result.

 The win-rate asks, “How often did the quarter finish higher?”

Every strictly positive quarter counts as one win, regardless of size.  

Together, the measures describe magnitude, the middle experience, and frequency.

Every quarter begins at 100 using its last September close. Calendar dates are aligned, with the preceding close carried forward over non-trading dates. The average chart takes the equally weighted mean level on each date; the median chart takes the middle level on each date. A median path can draw its middle observation from different years as the quarter progresses—it need not trace any one actual year.

The midterm sample had an average return 2.74 percentage points higher, a median 3.09 points higher, and a win rate 7.8 points higher than the all-years sample. Suffice to say that the historical statistics put today within a generally favorable seasonal window.

Our Earlier Research on Strongly Positive January through August Performance Support a Bullish Position

The S&P 500 Index gained 12.28% from December 31, 2025 through August 31, 2026. Of the 59 years from 1940–2025 with positive January–August returns, the fourth quarter finished higher 47 times (79.7%). This win-rate was marginally higher than the fourth quarter win-rates for all years,

The Bottom line

Seasonality, the stronger Mid-Term Election Year fourth quarter data, and the favorable first 8-month of the calendar year market performance make for a constructive backdrop. They support a disciplined, risk-appropriate positioning regime for the fourth quarter of 2026 while maintaining a well-diversified portfolio.

Source: Bloomberg Finance L.P. / LRG Wealth Advisors Analysis [August 1, 1950 – October 19, 2026]

Calculations use the SPX daily closing-prices through October 19, 2026. Historical fourth quarter results cover completed quarters from 1940–2025. Returns are price-only and exclude dividends, fees, and taxes. Historical patterns can change. Past performance does not guarantee future results. This material is educational and is not individualized investment advice.

LRG Wealth Advisors is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC (member FINRA and SIPC). Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC.

This is not an offer to buy or sell securities, nor should anything contained herein be construed as a recommendation or advice of any kind. Consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. No investment process is free of risk, and there is no guarantee that any investment process or investment opportunities will be profitable or suitable for all investors. Past performance is neither indicative nor a guarantee of future results. You cannot invest directly in an index.

These materials were created for informational purposes only; the opinions and positions stated are those of the author(s) and are not necessarily the official opinion or position of Hightower Advisors, LLC or its affiliates (“Hightower”). Any examples used are for illustrative purposes only and based on generic assumptions. All data or other information referenced is from sources believed to be reliable but not independently verified. Information provided is as of the date referenced and is subject to change without notice. Hightower assumes no liability for any action made or taken in reliance on or relating in any way to this information. Hightower makes no representations or warranties, express or implied, as to the accuracy or completeness of the information, for statements or errors or omissions, or results obtained from the use of this information. References to any person, organization, or the inclusion of external hyperlinks does not constitute endorsement (or guarantee of accuracy or safety) by Hightower of any such person, organization or linked website or the information, products or services contained therein.

Click here for definitions of and disclosures specific to commonly used terms.