Cowen Dismisses 'Everyone Expects It' Argument Against Q4 Selloff

Market analyst Benjamin Cowen states that the widely predicted Q4 selloff in US stocks materialized on time, refuting the idea that such a broadly anticipated move could not occur.

The forecast relies on three midterm cycles, and Cowen describes it as imperfect. The Nasdaq has dropped over 10%, Cowen notes, similar to 2018. He applies the same logic to Bitcoin (BTC), which also tends to find a bottom in Q4.

Can Consensus Shield Markets From a Downturn?

In a video, Cowen said he had raised the Q4 risk throughout the year while emphasizing it was never assured.

He references 2018, when equities declined 23% late in the year. In 2022, a roughly 23% drop began in the third quarter.

According to Cowen, the Russell index has slipped 11% to 12% and the Dow Jones Industrial Average approximately 7%. The S&P 500 has dropped around 4%.

Stock Market Correction: Q4 2026

— Benjamin Cowen (@benjamincowen) November 2, 2026

Skeptics had warned weeks earlier that the widespread expectation would cancel out the move. Cowen responds that the same objection was raised ahead of Bitcoin's lows in February and the summer.

He views Google's post-earnings slide as confirmation of the correction. Alphabet closed 12.6% lower on Oct. 29, data from Trefis shows.

What Might Disrupt the Cycle?

Cowen anticipates a low in the next couple of months, then a recovery. The major narrative ahead, in his view, is the OpenAI IPO, which might come in early 2027.

Morgan Stanley strategist Mike Wilson disagrees, interpreting any downturn as a buying chance. He predicts a fall toward 7,100 on the S&P 500 could lead to a rally to 8,000.

The drop follows a 2.86% Nasdaq decline on Friday, with analysts flagging midterm and AI risks this week.

Cowen points to the Iran conflict and the ongoing midterm elections as sources of added volatility. He expects the S&P 500 to be one of the last to decline before the administration issues a policy response.

The divide tests whether widespread consensus can insulate markets from seasonal drops. Cowen's earlier warnings suggest the same test applies to Bitcoin.