Tech And Semiconductors Lead A Midterm Style Correction

Market Commentary – November 9, 2026

Midterm election years have historically included a bear-market correction — a decline of 20% or more —around the middle of the year.

The 2026 midterm election cycle has not followed that pattern. Instead, it is beginning to resemble the 2018 midterm year, the previous midterm election year under President Trump, when the S&P 500 fell 20% from October through December. That correction lasted 57 trading days. The market then recovered over the next 85 trading days, and by the summer of 2019, the S&P 500 had rallied nearly 30% from the low set on December 24, 2018.

Semiconductors, leaders of the current bull market, are signaling that a correction is underway. The group has broken down from a topping formation that began in May. We had hoped the top end of the trading range would be tested during a year-end rally. Rallies may still occur, but the pressure on AI-related stocks could persist. We were quoted yesterday in The Wall Street Journal, noting: “There is fear now that the build-out of AI is going to slow, due to the Democrats taking control of Congress, which is causing a negative repricing of the AI trade. … We do not believe this is the end of the secular bull market.”

The repricing of the AI trade may take weeks or months to play out, putting a Grinch-like damper on the holiday season. Still, the good news is that a correction is most likely going to reset the market and allow the Technology trade to resume its bull-market trend