The Corner February 2026

Perspectives – February 18, 2026

Executive Summary: Brace For Continued Volatility

The equity market has started the year experiencing high volatility. It feels like a whole year’s worth of events compressed into just a month and a half. We expect this heightened volatility to persist through a good portion of 2026, which is seen as the norm for mid-term election years. Why? Because historically mid-term election years have been the most turbulent phase of the presidential cycle, with average drawdowns (corrections) of 19%. But it’s important to note that the rallies that occurred off of the lows of those corrections were very strong, gaining an average of 31% one year later.

So far, the S&P 500 is following the historical pattern of a mid-term election year. Investors need to remain fearless and, to weather this volatility, portfolios need to be diversified. We maintain that the secular bull market remains intact, and our year-end forecast for the S&P 500 is 7500.