Chart of the Week

What happens on bad days?

November 13, 2026

Time to Read: 3 mins

The recent one-day equity selloff reflected weaker sentiment amid election uncertainty and concerns that slower artificial intelligence spending could weigh on growth and earnings. Still, pullbacks of this magnitude have often been followed by solid returns, and we remain constructive given the economy’s resilience and AI’s long-term potential.

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During a volatile week, the S&P 500 closed down more than 4% in a single day, marking a material decline in equities, especially AI stocks. Sentiment weakened after the election results due to concerns that AI capital spending and the pace of the data center buildout could slow. If so, economic growth and earnings momentum could also weaken.

While we expect near-term volatility to persist, history suggests stocks will gradually recover, particularly if there is no recession — and we do not expect one. Since 1928, the S&P 500 has posted a one-day decline of 4% or more 159 times, or 0.6% of all trading days. Twelve months later, the index has posted a median return of 11.4%.

Looking ahead, we expect growth to slow in 2027. However, we believe the economy will continue to expand, though at a more moderate pace than this year, and that earnings growth should remain positive and even above average. We also remain constructive on the long-term AI investment case, given the technology’s potential for durable efficiency gains and productivity improvements as adoption spreads.

Our advice remains the same: stay diversified, stay fully invested and use market pullbacks to add equity exposure.

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Play the long game

When it comes to investing, time matters. While headlines and short-term perspectives can lead investors to try and time the market, investors have historically been rewarded by playing the long game. Rather than overreacting to market noise, investing over longer time periods can help smooth the ride without sacrificing returns. The lesson: stay diversified and invested for the long term.

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Contained contagion?

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Can the bull run in corporate margins continue?

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Higher yields, but lower sensitivity

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