RBC Capital Markets warns of 10% US stock pullback risk as midterms approach

Wall Street’s pre-election jitters are starting to show up in research notes. RBC Capital Markets strategists, led by Lori Calvasina, are warning that the S&P 500 could drop anywhere from 5% to 10% in the weeks ahead, with seasonal weakness and midterm election uncertainty doing the heavy lifting on the downside case. The firm published its assessment on September 9, 2026, flagging that the index had entered one of the calendar’s historically least forgiving stretches, while November 3 midterms loom as a potential catalyst for market turbulence. Why September and midterms make a difficult combination September has a reputation problem on Wall Street, and the data mostly backs it up. RBC noted that the month has produced declines in five of the past ten years, making it a reliable source of heartburn for equity investors even in otherwise strong market environments. Layer midterm elections on top of that baseline weakness, and you get a specific set of pressures that RBC is tracking closely. Betting markets have begun pricing in a higher probability of a Democratic sweep, an outcome the firm characterizes as less favorable for equities, at least in the short term. There is also ...