History tells us that markets are usually flat in the run-up to midterm elections. Can strong earnings continue to power the market through the election and beyond? On this episode, host Mike Townsend is joined by Joe Mazzola, Schwab’s head trading and derivatives strategist, for a conversation about whether history still offers a useful guide to a market that has repeatedly defied it in 2026. Joe shares how an unusually strong earnings backdrop—with revenue, profit, and margin growth rising together—has powered the rally, and why a higher bar for future results could make those gains harder to repeat. He also unpacks how turmoil in the bond market is impacting equities and how the market is thinking about a possible Fed rate hike. And he shares practical approaches investors can consider to manage short-term volatility heading into the election and where investors seeking genuine diversification might look for opportunities.
Mike also provides his thoughts on the latest developments in Washington, including a preview of next week’s Fed meeting, how Congress has staved off—for now—a government shutdown, and the implications of the national debt passing the $40 trillion mark.
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This material is intended for general informational and educational purposes only. This should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned are not suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decisions.
All expressions of opinion are subject to change without notice in reaction to shifting market, economic or political conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.
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All names and market data shown are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.
Diversification and asset allocation strategies do not ensure a profit and do not protect against losses in declining markets.
Performance may be affected by risks associated with non-diversification, including investments in specific countries or sectors. Additional risks may also include, but are not limited to, investments in foreign securities, especially emerging markets, real estate investment trusts (REITs), fixed income, municipal securities including state specific municipal securities, small capitalization securities and commodities. Each individual investor should consider these risks carefully before investing in a particular security or strategy.
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