The Dow Jones Industrial Average is poised to close out one of its best months in its 126-year industry this week as investors shake off their worst recessions ahead of Halloween, but the historic gain may be little more than a mirage.
It's on track to be the best ever.
After a strong third-quarter gross domestic product reading, the blue chip index rose 1.2% and is up 12% for the month.
It would be the second best month on a percentage basis over the last 30 years, coming on the heels of the worst September in 20 years.
This would be the biggest October gain since the index was founded in 1896, and the only other 10% October gains for the index.
The S&P 500 is up seven percent, but the tech-laden Nasdaq is only up 3%.
Other indexes may provide a more accurate view of the market despite the fact that the DOW tracks 30 large public companies. The S&P is down 20% year-to-date, but it is still better than the 31% decline in the DOW. Aggressive monetary policy and interest rate hikes by the Federal Reserve have led to a decline in the stock market. The last two days have been rough for investors who are heavily invested in technology stocks.
Goldman Sachs strategists said in a Tuesday note to clients that the S&P could plunge 25% further in a recession. The normal conditions for an equity trough are not clearly visible yet.
The S&P has risen about 5% on average during the period since 1988 and October marked the beginning of the fourth quarter.
The worst could come next year.
Big tech stocks have done well as FAANG softens its bite.
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