"Much of this edge stems from seasonal factors, including the Christmas holiday shopping surge that boosts retail and consumer sectors from November through December. Strong earnings reports in Q4 also often fuel optimism, as companies close out the year with solid results. The quarter also aligns with the close of the old investing adage to "sell in May and go away," where investors who sidelined themselves during the slower summer months return to the markets adding capital, driving demand."
"In election years like 2024, Q4 volatility can add further upside as policy clarity emerges. Historically, 70% of Q4 periods since 1928 ended positively, compared to 65% for other quarters. This pattern held in 2024, with the index up 5.2% amid tech rebounds. For 2025, analysts expect similar momentum, supported by cooling inflation and potential rate cuts, setting the stage for broad market advances. Government shutdowns, like the one we have now, also see stocks rise 17% on average in the 12 months following on."
October begins the fourth quarter, historically the strongest period for U.S. equities. Seasonal factors such as the Christmas shopping surge boost retail and consumer sectors from November through December. Strong Q4 corporate earnings frequently increase investor optimism. Investors who reduced exposure during summer typically re-enter markets in Q4, adding capital and driving demand. Election-year volatility can amplify Q4 gains as policy clarity emerges. Since 1928, 70% of Q4 periods ended positively versus 65% for other quarters; 2024 saw the index up 5.2% on tech rebounds. Analysts expect 2025 momentum from cooling inflation and potential rate cuts, and government shutdowns have preceded 17% average stock gains over the following 12 months.
Read at 24/7 Wall St.
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