Good morning, investors. Nvidia stock hit a record high to start the week and now investors are wondering whether the chip maker could actually be undervalued at a $5.6 trillion valuation.

I’ll be joining Stuart Varney on Fox Business at 9:20 AM ET this morning to talk stocks, AI, and more. Hope to see you there!

History says the stock market’s toughest stretch of the midterm cycle could already be behind us.

The S&P 500 has averaged 31.8% return in the 12 months after the lowest close of a midterm election year dating back to 1950, according to a report from Silvia Insights, a stat with a 19-for-19 win rate.

March 30 marked the lowest level of 2026 so far when the index touched 6,343, and it’s since gained more than 21%. 

The analysis showed just six of the 19 historical lows arrived in the fourth quarter of a midterm year.

If the S&P 500 were to fall into a bear market before Christmas then the clock would reset, though seasonality and the current backdrop make that an unlikely setup.

It’s true that tracking midterm lows has a hindsight bias.

But the seasonal pattern is just as bullish.

Silvia Insights found that the stretch from the October 31 close of a midterm year to the following April 30 has delivered a positive S&P 500 return in all 19 cycles since 1950 with nearly a 15% average.

At any rate, stocks have already fared far better than usual with more than a 12% return in 2026. The S&P 500 is typically flat year-to-date by October of a midterm year, and only averages a 4.6% return for the full year.

Meanwhile, the index has seen a 9% drawdown this year, shallower than the typical 17.5% sell-off for midterm years across the last seven decades.

While the historical data suggest it makes sense to stay bullish through 2027, two risks stand out: 

Stocks under a divided government under a Republican president have averaged a 7.33% annual return, versus more than 14% unified.  

That’s not to mention how ten companies make up nearly 40% of the S&P 500’s market value.

Any hiccups among the biggest names would create an outsized drag on the entire index.

That said, history is sending a clear message for investors right now.

We talk about the AI race all the time in this newsletter, and everyone has a different take on whether OpenAI, Anthropic, Google, Meta or even SpaceXAI is in the lead. 

Whatever your favorite AI Lab is, there is a way to invest in it through Harbor Capital Advisors’ AI LabsEcosystem ETF Suite. 

These ETFs allow you to invest in the ecosystem behind the AI Lab you believe in most.

Search Harbor AI Labs ETFs wherever you invest, or follow HarborCapital on X to learn more.*

🛢 Iraq is building its own tanker fleet to move crude through the Strait of Hormuz. State-owned Iraqi Oil Tankers Co. is chartering a VLCC and a Suezmax, after Saudi-to-China benchmark tanker rates surged to $1.29 million per day from under $30,000 before 2025. (Bloomberg)

🚀 Nvidia and AMD just hit record highs. Yet the technology sector's forward P/E has expanded just 14% since October 2022 versus a 250% surge in the three years before the March 2000 bubble peak. Earnings are doing most of the work. (Yahoo Finance)

📉 Amazon just hit its lowest valuation ever as a public company. The stock trades at a 20x trailing P/E even as it has $220 billion of planned 2026 capex. Only Alphabet carries a lower multiple inside the Magnificent 7. (Yahoo Finance)

🗓 October 6, 1979: Fed Chair Paul Volcker's "Saturday Night Special" announced a shift from targeting interest rates to targeting money supply. The move cleared the way for the Fed-funds rate to climb above 20% within six months.

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*Visit harborcapital.com for a prospectus containing investment objectives, risks, fees, expenses and other important information. Read and consider it carefully before investing. Risks include principal loss and artificial intelligence-related risks. Harbor ETFs are distributed by Foreside Fund Services, LLC.

Harbor is not affiliated with Opening Bell Media, and the funds are not affiliated with, sponsored by, or endorsed by any AI lab.