Peter Schiff Warns Stock Market Crash Before Midterms 'Is Not Outside the Realm of Possibility' — 'This Is October'

Veteran investor Peter Schiff warned Thursday that there was a possibility of a stock market crash before the midterm elections, citing rising inflation, a weak economy and an AI boom that is getting harder to finance.

An October Crash

“Remember, this is October,” Schiff said in a post on X, adding that treasury bond yields have risen sharply, rising inflation, a softer job market and a weak economy could potentially lead to a market crash.

“A stock market crash before the midterms is not outside the realm of possibility,” the investor said.

A stock market crash before the midterms is not outside the realm of possibility. Remember, this is October. Plus, we have the most expensive stock market in history, bond yields have risen sharply, inflation is rising rapidly, the job market is soft, and the economy is weak.

— Peter Schiff (@PeterSchiff) October 22, 2026

October has a reputation for market turmoil, known as the ‘October Effect,’ and it rests on some of the worst crashes in market history.

Schiff also added that investors are worried about a slowdown in AI spending as borrowing to finance the buildout gets more expensive and scarce.

“AI capex is all that’s keeping GDP positive, the impending recession is very bullish for gold and the miners,” he said.

Investors are concerned about a slowdown in AI capex as borrowing to finance the buildout becomes more expensive and scarce. Gold and gold miners are down too, but since AI capex is all that's keeping GDP positive, the impending recession is very bullish for gold and the miners.

— Peter Schiff (@PeterSchiff) October 22, 2026

AI Spending Rattles Credit Markets

The cost of insuring Meta Platforms Inc. (NASDAQ:META) debt against default rose to a record high on Thursday as investors weighed its growing AI spending plans, according to Markit data cited by Reuters.

CoreWeave Inc. (NASDAQ:CRWV) is under the same pressure. Its bond yields have climbed to record highs as its debt keeps rising and fears of an AI bubble grow.

The S&P 500 closed 1.21% lower on Thursday, while the Nasdaq composite fell 2.60%.

Rates And Oil Add To The Pressure

Consumer prices rose 3.7% in September from a year earlier, and minutes of the Federal Reserve’s September meeting showed most officials see another rate hike as likely appropriate by year-end.

The 10-year Treasury yield stood around 4.96% Thursday, after recently trading above 5%, while longer-term yields remained elevated.

The war in Iran has kept oil prices at highs, with Brent crude for December deliveries trading 0.53% higher at $113.77 a barrel, while WTI futures were up 0.58% at $100.05.

Price Action: The State Street SPDR S&P 500 ETF Trust (NYSE:SPY) fell 1.18% on Thursday to close at $763.96 and fell 0.11% to $763.11 in extended trading, according to Yahoo Finance. The Invesco QQQ Trust (NASDAQ:QQQ) fell 2.86% to $704.47 and was up 0.03% at $704.71 in after-hours trading.

Benzinga Edge rankings indicate the Invesco QQQ Trust has a Momentum score in the 75th percentile.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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