Three Weeks Before The Midterms, Donald Trump Has A Stock Market Problem Hiding In Plain Sight. The Stealth Bear Market Is Already Here
The S&P 500 sits near record highs, but that headline number may be hiding a very different reality for the stocks most Americans actually own, and the timing could not be more awkward for the White House.
Capital Blueprint puts the S&P 500 itself about 0.1% below its Oct. 6 record. Most stocks show far larger declines.
While there is no formal definition of a “stealth bear market,” FAST Graphs uses it when several stocks fall more than 20% while the overall market holds. EBC used it on March 30, 2026 for a grinding decline that the composite index hides. Real Investment Advice applied it to 2022, when capital eroded beneath modest index losses.
The evidence below is consistent with the label. Apart from the ETF data, figures are attributed to the outlets that published them.
Four Gauges, Four Different Readings
- TheTradingTools says 56% of “eligible” US stocks were more than 20% below their highs on Oct. 12. The page does not define “eligible.” The median stock was 24.3% below its high.
- Strategist Mike Wilson counted 51% of Russell 3000 stocks down more than 20% from June highs in his Oct. 5 note. Two weeks earlier the share was just over 40%. These figures come from copies of the note.
- S&P 500 members more than 20% below their 52-week highs: TheTradingTools counted 34.8% at the Oct. 9 close. MarketWatch cited 44% earlier in October.
- Smallest of all: ChartRow puts the equal-weight S&P 500 about 4.4% below its Aug. 14 closing high.
Each measure counts a different group of stocks from a different peak, so they cannot be combined or averaged. Two come from the same site. Wilson and MarketWatch provide independent support.
TheTradingTools also runs a Hidden Bear Index. It flags a regime when the equal-weight index is 2 points further below its trailing high than the cap-weighted index, while the cap-weighted index is less than 10% down. As of Oct. 12, the flag had been on for 18 sessions, with the equal-weight index 4.3% off its high. The regime measures only the gap between two indexes. The average stock’s drawdown is a separate measure.
Capital Blueprint reports that 96% of semiconductor stocks are down more than 20% from June highs, compared with about 4% of banks. It says Microsoft (NASDAQ:MSFT | MSFT Price Prediction), NVIDIA (NASDAQ:NVDA), Apple (NASDAQ:AAPL) and Meta Platforms (NASDAQ:META) added about 300 index points over three quarters, according to Citadel Securities. The other 496 members took away about 150.
A Scoreboard Many Voters Skip
Reuters reported on September 18, 2026 that “Trump makes the stock market his scoreboard, but many Americans aren’t even in the game.” In February he cited a 50,000 Dow to reporters. In his State of the Union address he cited 53 record highs since the election. NPR, FactCheck.org and money.com fact-checked the speech’s retirement-account claim. PBS checked similar claims in June.
Gallup put stock ownership at 62% of Americans in 2025. Among people making $100,000 or more it was 87%, and among those under $50,000 it was 28%. Because ownership follows income, weakness in the typical stock does not reach all voters equally.
Fauvelle-Aymar and Stegmaier studied 1960 to 2011. They measured presidential approval, and they used a headline index. They found that a 10-point acceleration in the index went with a 2.8-point gain in approval. The study offers no evidence about midterm results.
Evidence Cutting the Other Way
Election Day is Nov. 3. In September, Wilson’s firm published history showing the strongest average return in the year after midterms, 23%, came under a Republican president with a split Congress. It also warned against letting election noise drive portfolios. Silver’s forecast, which conflicts with the firm’s outlook for the chambers, gives Democrats a 74.8% chance of winning the Senate and a 93.1% chance of winning the House. No cited research links weak breadth to election outcomes.
The equal-weight index is up 12.54% this year with dividends. TheTradingTools reports that since 2010, Hidden Bear days were followed by above-average returns, positive 93% of the time, across 454 overlapping days. The site itself cautions against reading the signal as a crash warning or a timing trigger. These are historical averages, and riding a narrow, megacap-led market is viable as long as the exit is planned (we wrote a free handbook on exactly that, here).
Wilson’s view is that closing the gap depends on Treasury volatility. If bond volatility remains high, he sees the index at roughly 7,300. Jamie Dimon said on Oct. 13 that rates, deficits and other forces “continue to shift under the surface,” though he was speaking about the broader economy. The index and the typical stock are telling different stories, and both are accurate.
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AJ spent 10 years writing about financial markets at The Motley Fool. His coverage centers on technology stocks and the broader macroeconomic trends, from interest rates to geopolitics, that shape where markets are headed next. AJ is drawn to the stories where big-picture economics and individual companies collide.
