Seasonal week ahead: what history says after a rough October stretch

Last week's AI chip rout and hot inflation set the scene. History gives context for the weeks to come.

By Knowledge of Markets, the AI research desk of Market Seasonality. Statistics computed by code, facts checked against sources. October 19, 2026. Not investment advice.

Sources: CoinDesk, BBC, Cointelegraph, Investing.com, MarketWatch. Details

What moved markets last week?

Three stories dominated. The first was a rout in AI chip stocks. The KOSPI finished Thursday 7.5% lower at 5,554 points, its lowest close since April 8, which took its week-to-date losses to 15.5%. SK Hynix fell 11% and Samsung Electronics finished 9.5% lower, with concerns over AI debt obligations, foreign capital outflows and competition from China cited.

The second was inflation. US inflation rose to 3.7% in the year to September, up from 3.4% in the 12 months to August and above forecasts, driven by higher petrol prices. Bond yields targeted new 24-year highs on the back of the hot report, and spot gold slipped 1.5% as Fed October rate hike expectations rose. Bets on an October Fed rate hike briefly spiked to nearly 50% after the report, but have since cooled.

The third came on Friday. Wall Street's fear gauge, the VIX index, spiked as stocks dropped. The Nasdaq Composite closed -2.15% that day and the S&P 500 closed -1.09%. Chip stocks were already heading toward their worst stretch in 16 months as AI fatigue gripped the market. Bitcoin hit $80,154 earlier in the week, a level last seen on Sept. 20, as crypto tracked the losses in South Korean stocks.

Which markets run ahead of or behind their season?

Seasonality gives each market a typical path for the month. Comparing this year's month-to-date move to that path shows who is out of step.

The KOSPI has averaged -0.43% in October since 1997, a soft month. This October it is -17.11%, far below even that weak path. Bitcoin is the sharper contrast. October is its strongest month on average at +16.63% (rank 1 of 12), yet it stands at -2.60% so far. Gold has averaged +0.13% in October, and is at -0.13% this month, close to its quiet norm.

The Nasdaq Composite is -2.68% for October against a typical month of +0.77%. The S&P 500 is +0.10% against +0.55%. The Swiss Market Index runs the other way at +4.06%, ahead of an October average of +1.26%.

What is on the calendar this week, and how did markets react to similar events before?

Earnings season continues, and the market is watching how AI spending plans come across. China's economy grew 4.5% in the third quarter, up from the previous period, as the AI boom helped boost exports. Bitcoin jumped to $82,500 and Asian stocks and Nasdaq futures rose as China GDP beat estimates and oil prices fell. That gave the week a calmer start than Friday's close suggested.

The Federal Reserve raised rates on 2026-09-16 in the first hike of this cycle. History offers a reference for how markets behave in the weeks after such a first hike. After first hikes, the S&P 500 has averaged -1.20% over 20 trading days, with 43% of cases higher, across 7 events. The Nasdaq Composite averaged -1.46%. Gold averaged +0.02% over the same window.

Samples of this size are small, so these averages show a tendency of history and carry no promise. Hike cycles differ, and this one arrived with petrol-driven inflation.

What does the season say for the rest of October and November?

The calendar turns more favourable for stocks in November. The Nasdaq Composite has averaged +2.06% in November, with 71% of Novembers higher, which ranks as one of the stronger months (rank 2 of 12). The S&P 500 has averaged +1.01% in November, and its last ten Novembers average +4.15%. The Swiss Market Index has its strongest month in November on average, at +1.82% (rank 1 of 12).

This is also a midterm election year. Since the start of the series, the fourth quarter of midterm years has averaged +5.55%, with 83% of those quarters higher across 24 cases. All fourth quarters together average +2.89%.

Bitcoin carries a seasonal tailwind into the second half of October, then a smaller one in November at +7.51% on average. The KOSPI has averaged +2.91% in November, a clear step up from October, though its drawdown from its high is -37.81%. The US ten-year yield has a notable seasonal pattern too: November is the weakest month for yields on average at -7 bp (rank 12 of 12), with 44% of Novembers showing a rise.

What scenarios could play out this week, and what would signal them?

Scenario one: the Friday fear fades. History says Friday panics usually fade on Monday, and China's data gave Asia a lift. Signposts: the VIX falls back, chip stocks stop sliding, and Bitcoin holds the $82,500 area it reclaimed on Monday.

Scenario two: the chip rout widens. Foreign investors sold around 173 trillion won ($129 billion) of SK Hynix and Samsung shares since the start of 2026, most of the year-to-date KOSPI sales. If that selling continues, it can reach global technology shares. Signposts: more circuit breakers in Seoul, further falls in Nasdaq futures, and weak guidance from chip names.

Scenario three: rates take over. Another hot inflation print or higher Treasury yields would revive rate hike bets, which weigh on gold, crypto and long-duration technology shares. Signposts: the US ten-year yield, the pricing of the next Fed meeting and the dollar.

What to keep in mind about seasonal patterns?

A seasonal average is a summary of past years. It says what usually happened, and the spread around it is wide. The percentage of years up, shown next to each average, helps judge how reliable a pattern is. Bitcoin has risen in 75% of Octobers, a strong pattern but far from every year.

News can overwhelm the calendar. This year's chip sell-off and hot inflation are the type of events that push markets away from their typical paths. The seasonal view gives context for what comes next. It makes no forecast.

What to watch

• The VIX level and Nasdaq futures at the open on Monday
• Chip stocks in Seoul, Tokyo and Taipei after last week's falls
• The US ten-year yield and any new rate hike pricing
• Whether Bitcoin holds $82,500 through the week
• Earnings from large technology names for signs on AI spending

Questions