Nasdaq's October slump meets a seasonally stronger November ahead
A Friday sell-off left the Nasdaq Composite down for the month. History shows what the next window usually brings.
What happened
Wall Street's fear gauge, the VIX index, spiked on Friday as stocks dropped. The Nasdaq Composite closed that day -2.15% lower and is -2.68% so far in October. Asia opened the week higher after China's economy grew 4.5% in the third quarter.
Sources: CoinDesk, BBC. Details
Why it matters
The AI trade drove the market for much of the year, and China's export boom is tied to it. A strong data point from Beijing can ease the mood after a rough session.
What history shows
History says Friday panics usually fade on Monday, according to the CoinDesk report.
The Nasdaq Composite has averaged +0.77% in October since 1971, with 55% of Octobers ending higher.
Seasonal backdrop
October is a middling month for US stocks. The Nasdaq Composite has averaged +0.77% in October, and the S&P 500 has averaged +0.55%. November is stronger: the Nasdaq Composite has averaged +2.06% in November with 71% of Novembers up, which ranks as one of the stronger months (rank 2 of 12). This October is running below that path, with the index at -2.68% for the month, so the seasonal record sets a higher bar for the weeks ahead than the tape has delivered so far.
Scenarios
Possible paths and the signs that would point to each. No probabilities. Testable ones are graded on the scorecard.
Fear fades
Volatility settles and the index recovers toward its usual late-year pattern.
- VIX falls back after Friday's spike
- Earnings from large tech names hold up
Selling continues
Rising borrowing costs keep pressure on technology shares and October stays weak.
- Treasury yields keep rising
- More weak sessions in chip names
What to watch
- The VIX level on Monday
- Big tech earnings this week
- Treasury yield direction