As October approaches, market sentiments appear mixed, yet there are indicators suggesting potential growth ahead, according to Jeffrey Hirsch, the editor of the Stock Trader’s Almanac. The recent performance of the S&P 500 has been noteworthy, achieving both intraday and closing all-time highs earlier this month. This positive momentum contrasts significantly with the average September decline of 4.2% experienced over the past five years, as the index has recorded gains exceeding 2% so far this month.
Despite facing a slight pullback with three consecutive days of losses, driven by worries over high price levels and the fragility of the artificial intelligence sector, Hirsch remains optimistic. He dismissed the notion of “Octoberphobia,” which refers to historically significant market crashes occurring in October, including those in 1929 and 1987. While September’s all-time highs have often resulted in moderated October performance, Hirsch believes the current market conditions are different.
He remarked, “Valuations are high, and breadth has some issues, but there’s so much money going in. The bullish momentum is hard to deny, and it doesn’t end early. These tops take a process.” He observed that the market is not exhibiting expected bearish seasonality, which he interprets as a sign of stronger underlying trends.
Adding a broader perspective, Hirsch pointed out that 2025 will be a post-election year, which traditionally has improved October performance. Historical data shows that the S&P 500 has averaged a gain of 1.3% during October in post-election years since 1950, surpassing the 0.9% average for the same month from 1950 to 2024.
Hirsch anticipates a substantial fourth-quarter rally, estimating a year-end target of 7,100 for the S&P 500, indicating a possible upside of over 7%. He identified factors such as advancements in artificial intelligence, expectations for Federal Reserve rate cuts, and ongoing government spending as key catalysts driving market activity. Hirsch also suggested that concerns surrounding a potential government shutdown are likely to be addressed satisfactorily.
As the S&P 500 has rebounded by more than 12% in 2025, Hirsch noted that the market continues to navigate through uncertainty, emphasizing a pattern where initial gains often lead to further increases. “It’s climbing that wall of worry still with how far we’ve come this year,” he concluded, highlighting the persistent dynamic of market optimism as the calendar turns toward the end of the year.
