Trivia: How Often Do Stocks End Higher in October?

The stock market has had a great run, returning more than 35% since its tariff-driven selloff in April. With those gains, many are predictably wondering if the S&P 500, Nasdaq and Dow Jones will continue to gain in October.

Investors are right to be curious. October is a bit notorious because the month features some pretty dramatic sell-offs.

For example, on October 19, 1987, the S&P 500 recorded a staggering and terrifying sell-off of 20.5% in a single day, and the benchmark index fell more than 16% in October 2008, in the midst of the Great Recession.

Given those major market sell-offs, it’s no wonder investors are getting nervous as the calendar turns to fall. Stocks took a hit on Friday, October 10, when the S&P 500 fell 2.7% (its steepest drop since April) on news that President Trump imposed an additional 100% tariff on China, reigniting the trade war.

• 2024: -0.99%

• 2023: -2.20%

• 2022: 7.99%

• 2021: 6.91%

• 2020: -2.77%

Which brings us to today’s trivia question:

What percentage of Octobers since 1950 has the S&P 500 finished the month higher?

Option 1: 43%

Option 2: 59%

Option 3: 67%

If you chose 59%, congratulations!

While October is prone to some notable declines, it can often produce major turning points in the market as losses set the stage for gains later in the year.

Overall, the Stock Trader’s Almanac reports that the S&P 500 has gained ground 59% of the time in October since 1950, generating an average return of 0.9%. That’s good enough to rank as the seventh-best month for S&P 500 returns.

The returns, however, are relatively tepid compared to other months like November, the best month historically for the market. November was up 69% of the time, with an average return of 1.9%.

Of course, nothing in the market is guaranteed and, as we have all heard many times, the past does not guarantee the future.

October is a good time to buy.

However, October’s historical returns suggest that if the market continues to pull back, it may not last long, given that November, December, and January are typically strong months for S&P 500 historical returns. For this reason, many view October’s declines as an opportunity to buy the dips.

While the odds favor weakness in October buying, there are certainly headwinds that could weigh on stocks this time around.

The S&P 500 is arguably very well valued, given that the index’s price-to-earnings ratio (P/E ratio) is 22.8, a level that has historically preceded mediocre returns.

There is also the ongoing risk that a new escalation of the trade war with China could spread and force investors to reconsider revenue growth and corporate profits. President Trump is likely using his 100% tariffs as a bargaining chip that can be removed if China’s President Xi plays nice with rare earth exports. Still, if a tariff retaliation proves more lasting, we could see stocks lose more ground.

Finally, cracks are appearing in the economic armor, especially in employment data. The unemployment rate was 4.3% in August, the highest since 2021, and while we don’t have data for September due to the shutdown in DC, payroll data from Bank of America and ADP suggest the jobs outlook worsened last month.

This weakness, however, is the main reason behind the Federal Reserve’s cut in interest rates in September by a quarter of a percentage point. And the Federal Reserve is likely to cut rates by another quarter point on October 29. CME’s FedWatch tool currently puts the odds of a 0.25% cut at 98%.

A rate cut would help borrowers and is generally good for corporate profits because it reduces interest payments. However, if those cuts aren’t enough, a slowing economy (and worries before that happens) could be a strong headwind to further gains.

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This story was originally published by TheStreet on October 11, 2025, where it first appeared in the Investment News and Strategies section. Add TheStreet as a preferred source by clicking here.